Income tax rules change: On February 1, Finance Minister Nirmala Sitharaman made several announcements regarding the new income tax regime, which is going to be implemented from April 1. Let’s know in sequence.
Income tax rules change: The new financial year is going to start from April 1. There are going to be many changes in this financial year, which will benefit the middle class. One of these decisions is related to income tax. Actually, on February 1, Finance Minister Nirmala Sitharaman made several announcements regarding the new income tax regime, which is going to be implemented from April 1. Let’s know in sequence.
Exemption up to Rs 12 lakh
Nirmala Sitharaman gave a big relief to the salaried and middle class by announcing complete exemption from income tax on annual income up to Rs 12 lakh. Income tax exemption will be given to taxpayers who opt for the new tax system. With a standard deduction of Rs 75,000 for salaried taxpayers, now there will be no tax up to Rs 12.75 lakh. She has also changed the tax slab. This will save Rs 1.1 lakh in tax for those earning up to Rs 25 lakh annually.
How many people will benefit?
By increasing the income tax exemption limit from Rs 7 lakh to Rs 12 lakh, one crore people will not have to pay any tax. The change in tax slab will benefit 6.3 crore people i.e. more than 80 percent taxpayers. Along with this, the tax exemption limit on interest for senior citizens has been increased from the current Rs 50,000 to Rs 1 lakh.
New income tax slab
Under the new tax system, income up to Rs 4 lakh will be tax free if the annual income is more than Rs 12 lakh. After this, five percent tax will be levied on income of Rs 4 to 8 lakh, 10 percent on income of Rs 8 to 12 lakh and 15 percent on income of Rs 12 to 16 lakh. At the same time, 20 percent tax will be levied on income between Rs 16 to 20 lakh, 25 percent on income of Rs 20-24 lakh and 30 percent on income of more than Rs 24 lakh.
It has also been proposed to increase the time limit for individuals filing updated income tax returns (ITR) to four years. Updated ITR is filed by those taxpayers who were unable to provide information about their correct income within the stipulated time. Currently, such returns can be filed within two years of the relevant tax assessment year. About 90 lakh taxpayers have voluntarily updated their income details by paying additional tax.
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