New Delhi:
Finance Minister Nirmala Sitharaman has introduced significant updates for taxpayers in the latest Modi 3.0 budget. The standard deduction has been raised from Rs 50,000 to Rs 75,000.
New Tax Regime
Additionally, the income tax slabs under the new tax regime have been revised:
- Income up to Rs 3 lakh: No tax
- Income from Rs 3 lakh to Rs 7 lakh: 5% tax
- Income from Rs 7 lakh to Rs 10 lakh: 10% tax
- Income from Rs 10 lakh to Rs 12 lakh: 15% tax
- Income from Rs 12 lakh to Rs 15 lakh: 20% tax
- Income above Rs 15 lakh: 30% tax
The Income Tax Act of 1961 will also be reviewed to simplify it and address tax-related legal issues.
Old Tax Regime
In the old tax regime:
- Income up to Rs 2.5 lakh: No tax
- Income from Rs 2.5 lakh to Rs 5 lakh: 5% tax
- Income from Rs 5 lakh to Rs 10 lakh: 20% tax
- Income above Rs 10 lakh: 30% tax
For those with an income up to Rs 5 lakh, a rebate of Rs 12,500 is available, effectively reducing the tax to zero for this income bracket.
No Changes for Old Tax Regime Users
Despite the improvements in the new tax regime, taxpayers sticking with the old tax system will not see any changes or additional reliefs.
The updates mainly benefit those who choose the new tax regime.
