The Union Budget 2026 has brought a series of tax and investment-related changes that directly impact India’s middle-class taxpayers. While the government has focused on fiscal consolidation and long-term economic stability, several provisions announced in the Budget are expected to increase the financial burden on salaried individuals, small investors, and households.

From higher taxes on certain investments to changes in deductions and compliance norms, these measures may affect disposable income and savings decisions for millions of taxpayers. In this article, we take a closer look at seven key changes in Budget 2026 that are likely to influence the financial planning of the middle class in the coming year.

The analysis below is based on announcements made in the Union Budget 2026 and official government disclosures.

At a Glance

• Trading: F&O tax rose by up to 150%.

• Gold: Secondary gold bonds now face capital gains tax.

• Date: Most changes start on April 1, 2026.

Trading Costs: The F&O Tax Hike

The state wants to cool down risky stock bets. Therefore, the Securities Transaction Tax (STT) on futures went up. It moved from 0.02% to 0.05%. Specifically, the tax on options rose to 0.15%. This hike makes frequent trading much more expensive. Retail users will feel the pinch on every trade. Use a low-cost broker to save money.

Gold Bonds: No More Free Gains

Sovereign Gold Bonds (SGBs) used to be tax-free at maturity. Actually, that rule changed for bonds bought on the exchange. You only get tax-free gains if you buy directly from the state. Bonds from the secondary market now face a 12.5% tax. Finally, this removes a popular way to save tax. Investors should check their bond source. Direct buying is now the best path.

Pension Cuts: The Disability Shift

The 2026 Budget limits tax breaks for defense personnel. Specifically, disability pensions for retired staff are now taxable. Only those forced out by injury keep the break. Actually, staff who retire after full service must pay tax now. This move aims to stop the misuse of the law. It hits veterans who count on every rupee. Military families must review their tax plans.

Buybacks and Alcohol: Higher Upfront Fees

Share buybacks are now taxed like a sale of stock. Therefore, promoters pay up to 30% tax on these deals. The state also hiked the tax on liquor sales. In fact, the tax at source moved from 1% to 2%. This means distributors and shops pay more upfront. Finally, drinkers will see higher prices at the bar. Both stock and sin goods cost more now.

Investor Blow: Interest Deduction Ends

Investors often borrow money to buy mutual funds or stocks. Specifically, you could once use interest costs to lower your tax. Budget 2026 ends this specific deduction. Actually, you cannot use interest to offset dividend income anymore. This makes “leveraged” investing much less attractive. Small investors must use their own cash now. Post-tax returns will drop for many.

Coffee Tax: The Machine Duty Hike

Even your morning caffeine fix is at risk. Specifically, the state removed duty breaks on coffee machines. Basic customs duty on these machines is now 10%. Therefore, office cafes and shops face higher equipment costs. Most firms will pass this cost to the customer. Actually, your daily cup could cost a few rupees more. Small luxuies are getting dearer.

Human Insight: The Reality Check

Don’t bank on “long-term growth” to fix these immediate pains. The state claims these hikes stop “speculation,” but they mostly hurt small retail traders. Actually, big funds have ways to hedge these costs that you do not. Reality Check: The coffee machine tax seems small, but it shows the state is hunting for revenue everywhere. Finally, promoters will likely stop buybacks and keep the cash. This could hurt the stock price for normal owners. Be wary of “simplified” tax acts.

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Corporate NPS Contribution

This is a tax benefit that is rarely used. However, this benefit is available in both the new and old Income Tax regimes. In the old regime, a deduction of up to Rs 1.5 lakh can be claimed in NPS under section 80C. Apart from this, a deduction of Rs 50,000 can be claimed under section 80CCD (1B). These benefits are not available in the new regime. However, the facility of deduction on employer’s contribution to the employee’s NPS account is available in the new regime.

An employer’s contribution of up to 14 per cent (basic pay plus DA) to the employee’s NPS account can be claimed as a deduction under section 80CCD(2). It is to be noted that there is a tax-free limit of Rs 7.5 lakh in a year for total cumulative benefits from the employer. Once the total benefits reach this limit, the employer’s contribution above this limit will be taxable.

Tax benefit on home loan interest on rented house

In the new income tax regime, tax benefits can be availed on the interest on home loan for a rented house. However, deduction of up to Rs 2 lakh in a year on interest on home loan for self-occupied property under section 24(B) is not allowed in the new regime.

In the old income tax regime, interest expenses are deducted from the rent received (after property tax and 30% standard deduction) to calculate income from house property. This reduces the taxable property income. This also reduces your total tax. If this calculation shows a loss instead of income from house property and it does not exceed Rs 2 lakh, then it can be set off with other income. This can be set off in the same financial year to reduce the tax liability. If the loss from rented property is more than Rs 2 lakh, then it can be carried forward and claimed during the next 8 financial years.

However, the rules for this tax benefit are slightly different in the new tax regime. Loss from house property can be set off only against income from house property. It cannot be set off against any other income.

Employers’ contribution to EPF is up to 12% of their basic salary

Your employer contributes 12% of your basic salary to your EPF account. Like the employer’s contribution to the NPS account, this amount is also exempt from tax as long as the aggregate retirement benefit from the employer exceeds the limit of Rs 7.5 lakh in a year.

Apart from this, gratuity payout, leave encashment and money received on maturity of insurance policy are also exempted from tax, but there are certain conditions for this.

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Especially from FY 2025–26, this regime will suit most taxpayers more. With the changed slab rates, standard deduction and now the salary structuring facility being provided by the companies, it is possible to pay ZERO tax even on a salary of up to ₹ 19,20,000. How? Let us now understand in detail.

How will ZERO TAX be implemented?

From FY 2025–26, the slabs of the New Tax Regime have been changed and along with that companies are now making the salary structure tax friendly. The result is that even if your annual salary is up to ₹19.20 lakh, you can pay ZERO TAX by making sensible deductions and structuring.

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Especially from FY 2025–26, this regime will suit most taxpayers more. With the changed slab rates, standard deduction and now the salary structuring facility being provided by the companies, it is possible to pay ZERO tax even on a salary of up to ₹ 19,20,000. How? Let us now understand in detail.

How will ZERO TAX be implemented?

From FY 2025–26, the slabs of the New Tax Regime have been changed and along with that companies are now making the salary structure tax friendly. The result is that even if your annual salary is up to ₹19.20 lakh, you can pay ZERO TAX by making sensible deductions and structuring.

New Tax Regime- FY 2025–26 Slabs

Keep in mind that under Section 87A, a tax exemption of ₹25,000 is available on taxable income up to ₹12 lakh, i.e. tax = ₹0

Real salary breakup of ₹19.20 lakh CTC

Suppose your company structures salaries like this.

Step-by-step calculation of taxable income

1. Standard Deduction – ₹75,000

₹19,20,000 – ₹75,000 = ₹18,45,000

2. Employer NPS Contribution – ₹84,000

(14% of Basic as per rules)
₹18,45,000 – ₹84,000 = ₹17,61,000

3. Flexi Pay  tax-free components – ₹6,23,600

₹17,61,000 – ₹6,23,600 = ₹11,37,400

4. Home Loan Interest + Rental Income Set-off – ₹2,60,000

If the house is a let-out:

• Interest Deduction: ₹2,00,000

• Rental Income Adjustment: ₹60,000

₹11,37,400 – ₹2,60,000 = ₹8,77,400

5. Other Deductions – ₹50,000

Let’s say:

• Gift exemption, family pension, or other miscellaneous

₹8,77,400 – ₹50,000 = ₹8,27,400 (Final Taxable Income)

Now understand the calculation of tax

What needs to be done for Zero Tax?

• Correct structuring of Flexi Pay

• Minimum PF (₹1,800/month)

• Employer NPS Contribution

• Home Loan Interest Benefit (with let-out)

• Other Income Adjustment + ₹50K exemption

The combination of all these makes your salary of ₹19.20 lakh tax free. You can request your HR to prepare your salary structure with a Flexi Pay plan. You can also increase your in-hand salary by opting for a minimum Provident Fund.

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The government claims that the new tax system is simple, transparent and has low tax rates. However, many people are still in the old tax regime because the list of exemptions and deductions available in it is long. But, there are some tax deductions and rebates in the new tax regime as well, which most people are not aware of.

What do you get in the new tax system?

Although the new tax regime does not have popular exemptions like HRA, LTA, 80C, home loan interest, some important deductions and a big tax rebate still exist. Let’s understand these in detail:

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The new financial year has started from 1 April. From this day onwards, the changes made in the budget in the new tax regime and the old tax regime have come into effect. Let us tell you that in the general budget presented on 1 February, Finance Minister Nirmala Sitharaman had made the tax zero for those earning up to Rs 12 lakh in the new tax regime.

In this budget, the old tax regime was kept as it is. In such a situation, the question arises whether the old tax regime is better or the new tax regime. Along with this, how can tax be saved in the new tax regime and how much benefit the taxpayer is going to get in this. If you also want to know all this, then we are telling about it in detail here.

Income Tax Slabs in New Tax Regime

Standard Deduction in New Tax Regime

In the new tax regime, the government is not levying any tax on income up to Rs 12 lakh. Also, salary based people also get a standard deduction of Rs 75 thousand in the new tax regime, so those who choose the new tax regime in FY 2025-26. They will not have to pay any tax on income up to Rs 12.75 lakh. On the other hand, for those whose annual salary is between Rs 20 to 24 lakh, a new slab has come in the new tax regime, in which 25 percent tax has to be paid. Tax slab in old tax regime

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If you are told that your salary has increased from today i.e. 1st April 2025 without appraisal, then you will probably think what kind of joke is this? But the truth is, if you come under the purview of Income Tax or are going to come under its purview from the new financial year, then for them the New Tax Regime is no less than an appraisal.

Actually, the new tax regime has come into effect from April 1, 2025, and this was announced in the budget. Finance Minister Nirmala Sitharaman has made major changes in the new tax regime and announced no income tax on income up to Rs 12 lakh annually, which will benefit the middle class the most. Apart from this, the new tax regime will also benefit from a standard deduction of Rs 75,000.

That means those whose annual salary is Rs 12.75 lakh will not have to pay any income tax. Let us tell you, before this, there was no income tax on income up to Rs 7 lakh in the new tax regime. But there was a provision of tax on income above this in both the new tax regime and the old tax regime.

A big announcement was made in the budget

Now people whose salary is up to Rs 12.75 lakh do not have to worry about income tax. Under section 87A, there was already tax exemption on income up to Rs 7 lakh, which has now been increased to Rs 12 lakh. Let’s understand with an example… If someone’s salary was Rs 10 lakh in the last financial year, and he had chosen the new tax regime. So he would have had to pay income tax in any case, but this year he will not have to pay any tax, that is, the amount he paid as income tax last year will be saved directly this year.

Employed people can switch between the new and old regime every year, so that a better option can be chosen according to their income and expenses. But most people will now prefer to go with the new tax regime, because it has many benefits.

What will happen to those in the old tax regime from April 1, 2025?

It is worth noting that the financial year 2025-26 is starting from April 1, 2025, and this will be the first full year of making the new tax regime the default option. However, the old tax regime will still exist. If it is beneficial based on your income and deductions, then you can choose it. Especially employed people can opt for it every year while filing their ITR.

For whom is the old tax regime beneficial now?

There were no major changes in the slabs or exemptions of the old regime in Budget 2025. Income up to Rs 2.5 lakh will be tax-free, and thereafter slabs of 5%, 20%, and 30% will apply, deductions such as 80C (1.5 lakh), 80D (25,000-50,000), and home loan interest (up to 2 lakh) will remain available. If you avail HRA, home loan, or make large investments, the old regime can still be beneficial. If you live on rent, pay home loan, or incur large medical expenses, then you can think about the old tax regime.

If your income is more than 15 lakhs and you avail deductions, then the tax can be reduced in the old regime. The tax slabs may be less in the new regime, but the total tax may increase due to lack of exemptions. Investors should compare both on the basis of their income, expenses, and investments and choose the right option. Let us know the advantages and disadvantages of the new tax slab.

Question- When can taxpayers shift to the new tax regime?

Answer- Taxpayers can shift to the new tax slab from the financial year 2025-26, i.e. from 1 April 2025. If you also want to avail tax exemption on income up to Rs 12 lakh, then you can now choose this regime. Especially those in the old tax regime can shift to it, whose income is up to Rs 12.75 lakh, because now they will not have to pay even a single rupee of income tax. Those in the old tax regime will only have to choose the new tax regime.

Question- How will there be no income tax on income up to Rs 12.75 lakh?

Answer- Under the new tax system in the budget, there will be no income tax on income up to Rs 12 lakh. Earlier this limit was Rs 7 lakh. If we include the standard deduction of Rs 75,000, then there will be no tax on personal income up to Rs 12.75 lakh. However, this exemption will apply only on salary. Income from other sources, such as capital gains, will continue to be taxed.

Question- Will the New Tax Slab-2025 prove beneficial?

Answer- Finance Minister Nirmala Sitharaman says that with the change in the new tax slab, now one crore taxpayers will not have to pay any tax. This simply means that now 9 out of 10 salaried persons will not have to pay income tax. According to CBDT Chairman Ravi Agarwal, in the financial year 2024-25 itself, more than 75 percent of the people have adopted the new tax regime, and now when income up to Rs 12 lakh has also been made tax free, then after this 90 percent to 97 percent of taxpayers can join this new tax system.

Question- For whom can the old tax regime still be beneficial?

Answer- Now the old scheme will be beneficial only for those who claim deduction under Chapter 6-1. Those who come in the salary class, who get HRA, and are also paying home loan. That is, those who invest in life insurance, mutual funds, house rent, children’s school fees, home loan, medical insurance, NPS in income tax can save tax by taking advantage of deduction. But now more than 95 percent of people will shift to the new tax regime.

Question- How many people pay income tax in the country?

Answer- According to the income tax return data of assessment year 2023-24, 7.54 crore salaried persons had filed tax returns. Out of these, the annual salary of 5.89 crore persons was less than Rs 7 lakh. According to the government, according to the new exemption limit of Rs 12 lakh, the number of people exempted from tax will increase to 6.77 crore. This means that now 89.8% of the salaried people will not pay any kind of income tax. Not only this, if we keep in mind the limit of Rs 12.75 lakh, then this number will increase to 6.92 crore, due to which 91.7% of the salaried people will be exempted from tax. This decision will benefit about 1.5 crore people, whose annual income is between Rs 7 lakh and Rs 12 lakh. Now they will not have to pay any tax on their salary income.

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Although the new tax regime has lower tax rates, it has removed many popular exemptions and deductions such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), interest on home loan, Section 80C, etc. Still, taxpayers can avail three major exemptions. Usually people are aware of only one and are less aware of the other two.

1. Standard Deduction

The benefit of standard deduction is available in the new tax regime for salaried employees and pensioners. This deduction was ₹ 50,000 for FY 2023-24, which has been increased to ₹ 75,000 from FY 2024-25. This change will help taxpayers reduce their taxable income, thereby reducing their tax liability.

2. Employer’s contribution to National Pension System (NPS)

Under the new tax regime, tax exemption is available on contributions made by the employer to the National Pension System (NPS). This exemption is given under section 80CCD(2). However, there is no exemption on contributions made by the employee himself. The employer’s contribution can be up to 10% of the employee’s basic salary and dearness allowance, which is tax free.

3. Gratuity

The gratuity received at the time of retirement is tax free even in the new tax regime. This exemption is provided under section 10(10) of the Income Tax Act. For government employees, the entire gratuity amount is tax free, while for non-government employees, gratuity up to a maximum of ₹20 lakh is tax free.

Apart from this, tax exemption is also available under section 10(10C) on the amount received under Voluntary Retirement Scheme (VRS). Also, the benefit of exemption under section 10(10AA) on leave encashment at the time of retirement is also available in the new tax regime.

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Although many traditional exemptions and deductions are not available in the new system, relief is still available in some selected cases.

The government has made some new changes in Budget 2025, which includes tax rebates and some special exemptions. Here we know in which cases you can get tax relief.

In which cases will tax exemption be available?

• Employer’s contribution to NPS – If the employer contributes to the National Pension System (NPS), it will be tax free under section 80CCD (2).
• Income from Agneepath scheme – Income earned under Agneepath scheme is exempted from tax under 80CCH.
• Deduction on recruitment of new employees – If the business recruits new employees, it will get 30% additional tax exemption for three years under 80JJAA.

Changes in Tax Rebate

Under Budget 2025, the tax rebate available under Section 87A has been increased. Till the financial year 2023-24, it was ₹ 25,000 but from the financial year 2025-26, it has been increased to ₹ 60,000.

Allowances available in both tax systems

Be it new or old, certain allowances will continue to be available in both tax systems:

• Travel expenses during transfer or tour
• Reimbursement of daily expenses incurred while travelling to work
• Travel expenses if the employer does not provide transport
• Transport Allowance for Blind, Hearing Impaired, Deaf-Mute or Severely Disabled Employees

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How will income of Rs 14.65 lakh be tax free

Now suppose your annual salary is Rs 14.65 lakh. Out of this, half the money i.e. 50 percent goes in the basic salary. Whereas, the remaining 50 percent comes in the form of other items and allowances. We will further calculate the tax deduction according to the amount of basic salary.

Complete calculation of tax exemption

If the company contributes 12% of the basic salary to the Employees Provident Fund, then tax deduction can be claimed on it. This will be Rs 87,900. At the same time, tax exemption is also available on the company’s contribution to the National Pension System (NPS). This contribution will be 14% of the basic salary i.e. Rs 1,02,550. Also, you get a standard deduction of Rs 75,000 in the new tax regime. That is, this amount will be directly reduced from your taxable income.

After taking advantage of all these exemptions, your net taxable income will be Rs 11,99,550 lakh. The government has made income up to Rs 12 lakh tax free, so this means that you will not have to pay a single rupee tax. But, you have to keep in mind that this system will come into effect from the next financial year i.e. 2025-26.

How much tax will be saved in total

If the government did not make income up to Rs 12 lakh tax free and did not give the benefit of tax deduction on EPS and NPS, then an annual income of Rs 14.65 lakh would have to pay heavy tax. According to the new tax regime, 5 percent tax (Rs 20 thousand) will be levied on income of Rs 4 to 8 lakh.

While 10% tax (Rs 40,000) will be levied on income between Rs 8 lakh and Rs 12 lakh, 15% tax will be levied on income between Rs 12 lakh and Rs 14.65 lakh. If the standard deduction of Rs 75,000 is removed, then 15% tax i.e. Rs 28,500 will be levied on Rs 1.90 lakh. In this way, the total tax liability will be Rs 88,500, which you can easily save.

The role of EPS and NPS is important

Tax exemption is available on Employee Pension Scheme (EPS) under section 80CCD(1) of Income Tax and on contribution to NPS under section 80CCD(2). However, in the new tax regime, this exemption is available only on the company’s contribution, as it is considered as your direct income. Therefore, you are allowed to claim tax exemption on it.

NPS i.e. National Payment System is a retirement plan. Those who join this government scheme get pension after retirement. In this, the contribution is invested in the market and the return received from it is given as pension. NPS was started in 2004. It was opened for the general public in 2009.

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Current Tax Slabs under New Tax Regime for Financial Year 2024-25

The new tax regime introduced in Budget 2020 offers lower tax rates along with fewer exemptions and deductions.

• For income up to Rs 3,00,000: Nil
• For income between Rs 3,00,001 and Rs 7,00,000: 5%
• For income between Rs 7,00,001 and Rs 10,00,000: 10%
• For income between Rs 10,00,001 and Rs 12,00,000: 15%
• For income between Rs 12,00,001 and Rs 15,00,000: 20%
• For income above Rs 15,00,000: 30%

This is the default tax regime. Under this regime, taxpayers can opt for lower rates but will have to forgo exemptions like HRA, LTA and deductions under sections 80C, 80D and others.

Standard deduction limit increased to Rs 75,000

However, taxpayers can avail standard deduction. In Budget 2024-25, the limit of standard deduction for salaried employees was increased to Rs 75,000. At the same time, it was increased to Rs 25,000 for family pensioners.

Current tax slabs under the old tax regime (for financial 2024-25)

The old tax regime, while retaining higher rates, allows taxpayers to claim various exemptions and deductions.

• For income up to Rs 2,50,000: Nil
• For income between Rs 2,50,001 and Rs 7,00,000: 5%
• For income between Rs 7,00,001 and Rs 10,00,000: 10%
• For income between Rs 10,00,001 and Rs 12,00,000: 15%
• For income between Rs 12,00,001 and Rs 15,00,000: 20%
• For income above Rs 15,00,000: 30%

For senior citizens aged 60-80 years, the basic exemption limit is Rs 3,00,000. For super senior citizens, i.e. those above 80 years, it is Rs 5,00,000.

• The old tax regime allowed tax deductions under various sections, such as:
• Under Section 80C, you can save tax on an amount up to Rs 1.5 lakh through investments like PPF, ELSS and LIC premium.
• Deduction on health insurance premium under section 80D
• Under Section 24(b), a deduction of up to Rs 2,00,000 can be claimed on interest paid on home loan.
• Other exemptions like HRA and LTA

How to choose the right tax regime

Choosing between the new and old tax regime will be beneficial for you, depends on your financial profile. The new tax regime is more suitable for those who invest very little. On the contrary, the old tax regime is suitable for those taxpayers who invest wisely and know how to take maximum advantage of the exemptions and deductions available on it.

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Union Budget 2025 is due within a month. The government may also introduce incentives to taxpayers in this budget to promote the new tax regime. After the policy announced in the July budget, the NDA 3.0 government is expected to take further steps to promote the new tax framework in the upcoming full budget. Discussions between the Prime Minister’s Office and leading economists have emphasized the need to promote fiscal measures to boost spending. In these discussions, several steps have been considered, from reducing income tax liability to increasing financial support for daily expenditure.

72% taxpayers adopted the new tax regime in AY 2024-25

Expectations of improvements in the new tax regime have increased, especially considering that the government is trying to make it more taxpayer-friendly. According to Finance Ministry data, about 72 per cent of the 7.28 crore taxpayers in the assessment year 2024-25 adopted the new tax regime while filing ITR. These figures are before the deadline of 31 July 2024. In contrast, only 28 per cent of taxpayers opted for the old tax regime.

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All kinds of speculations are being made about questions like what is going to be special in this budget, what is the government going to announce for which sector and which segment is going to get relief.

The biggest expectation from the budget for common people as well as special people is tax relief and the announcement of some special scheme or financial assistance by the government to deal with inflation. Sources have given some important information and told what the government can announce regarding tax in the upcoming budget 2025.

There may be a change in the tax regime?

Prakash Priyadarshi said that the preparations for the budget for the financial year 2026 are at their peak and the process of consultation with the industry has also been started. He quoted sources and said that the government can give a big news for the taxpayers in this budget.

Sources are telling that the government is exploring many such options in which special attention is being paid to how to increase domestic consumption. Many such options are also being discussed, one of which is to reduce the income tax for low-income groups and low-salary people.

Budget preparations for the financial year 2026 are at their peak and the process of consultation with the industry has also been started. He quoted sources as saying that the government can give a big news for the taxpayers in this budget. Sources are telling that the government is exploring many such options in which special attention is being paid to how to increase domestic consumption. Many such options are also being discussed, one of which is to reduce the income tax for low-income groups and low-salary people.

In this year’s budget, the government may consider the tax slab of Rs 3-7 lakh among the tax payers, especially under the new tax. He said, sources are telling that the income tax exemption limit, which is currently Rs 3 lakh in the new tax regime, should also be increased. The government has currently started discussions on this.

Let us tell you that there is still more than 1 month left for the presentation of the budget. Finance Minister Nirmala Sitharaman will present the budget in Parliament on Saturday, February 1, 2025 at 11 am.

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However, no changes have been made in the old tax regime. In the old regime, taxpayers get the benefit of various deductions and exemptions. So, if your annual income is Rs 10 lakh, which regime will be better for you?

In the old tax regime, taxpayers could avail benefits under various sections like 80C (up to Rs 1.5 lakh), 80D (health insurance premium) and standard deduction (Rs 50,000).

Old tax regime

Total deduction: ₹2,25,000
Taxable income: ₹10,00,000 – ₹2,25,000 = ₹7,75,000

Tax calculation:

Up to ₹2.5 lakh: Nil
₹2.5 lakh to ₹5 lakh: 5% = ₹12,500
₹5 lakh to ₹7.75 lakh: 20% = ₹55,000
Total tax: ₹67,500
Cess (4%): ₹2,600
Total tax payable: ₹70,100

New tax regime

The new tax regime has lower tax slabs but there are no deductions and exemptions.
Taxable income: ₹10,00,000 – ₹75,000 = ₹9,25,000

Tax calculation:

Up to ₹3 lakh: Nil
₹3 lakh to ₹7 lakh: 5% = ₹20,000
₹7 lakh to ₹9.25 lakh: 10% = ₹22,500
Total tax: ₹42,500
Cess (4%): ₹1,700
Total tax payable: ₹44,200

Comparison and Conclusion

Old regime tax: ₹70,100
New regime tax: ₹44,200

If your annual income is ₹10 lakh, the new tax regime reduces the tax liability by ₹25,900. However, if you are able to avail maximum deductions available in the old regime, it can be beneficial for you. Taxpayers should choose the right option based on their income, expenses and investment plans. The new system is simpler, but the old system offers the benefit of more exemptions.

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In such a situation, what if you can save more than Rs 50,000 in tax with the help of New Pension System (NPS)? Let’s understand the whole thing

Under the old regime of the Income Tax Act, people get the opportunity to save Rs 1.5 lakh under 80C. Whereas NPS gives people the opportunity to save tax-free income apart from this exemption limit. While the benefits of NPS can be availed in the new tax regime as well.

Benefits of NPS in the new tax regime

Under Section 80CCD (2) of the Income Tax Act, you can save tax through NPS even in the new tax regime. This can be up to 10 percent of your basic salary. In fact, the contribution made by an employee to NPS is tax-deduction in the new tax regime. Generally, in the pension scheme, an employee’s contribution of up to 10 percent of his basic salary is tax-free, in the new tax regime this limit is up to 14 percent.

In such a situation, if an employee adopts the NPS offered by his company or employer, then contribution up to 14 percent of his salary will be tax free.

More than Rs 50,000 tax will be saved

Above we talked about software engineers, whose salary is generally good. In such a situation, let us assume that the basic salary of an employee is Rs 1 lakh per month. Then his NPS contribution will be around Rs 14,000 per month. Then his overall income tax will be reduced by more than Rs 50,000.

Skip fixed deposits, invest in debt funds

If you want to increase your tax savings, then you should invest in debt funds instead of fixed deposits. In FDs, interest earned every year is taxable, whereas money invested in debt funds is taxable only when the money is withdrawn.

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After this change, now under the New Tax Regime, those earning Rs 7.75 lakh annually will not have to pay even a single rupee tax, but if your salary is Rs 10 lakh, then let us know how you can save tax on your entire income and will not have to pay even a single rupee tax.

You won’t have to pay a single rupee tax on earning 10 lakhs

If you want to save the entire amount on earning 10 lakhs, then you will have to leave the new tax regime and choose the option of old tax regime, in which many types of exemptions will have to be claimed, but if you do not claim tax exemption, then according to the tax slab under the old tax regime, you will have to pay 20 percent tax. However, if you claim tax exemption, then you can save the entire tax on earning 10 lakhs.

Also Read: Public Special Scheme: Deposit only ₹ 100 daily, you will get a return of up to 8 lakhs after so many years

How can you save tax in the old tax regime? 

• Under the old tax regime, a rebate of up to Rs 50,000 is available as standard deduction. In such a situation, now tax will be levied on Rs 9.50 lakh. 
• By investing in schemes like PPF, EPF, ELSS, NSC, you can save tax of Rs 1.5 lakh under Income Tax Section 80C. Now you will have to pay tax on Rs 8 lakh. 
• If you invest up to Rs 50,000 annually in the National Pension System (NPS), then under section 80CCD (1B) you are given an extra tax exemption of Rs 50,000. Now if you deduct another Rs 50,000, then tax will be levied on Rs 7.50 lakh. 
• If you have taken a home loan, you can save up to Rs 2 lakh on the interest under Section 24B of Income Tax. If you subtract another Rs 2 lakh from Rs 7.50 lakh, the total tax income will be Rs 5.50 lakh. 
• You can save tax up to Rs 25,000 by taking a medical policy under section 80D of income tax. This health insurance should have your name, your wife’s name and your children’s name. Apart from this, if you buy health insurance in the name of your parents, you can get an extra deduction of up to Rs 50,000. 
• In such a situation, if you subtract 75 thousand from 5.50 lakh, then the total tax liability will be 4.75 lakh, which will be below the old tax regime limit of Rs 5 lakh. This means that you will not have to pay a single rupee tax on an annual income of 10 lakh. 

How much tax will have to be paid on earning 10 lakhs in the new tax regime?

Even though Finance Minister Nirmala Sitharaman has changed the tax slab in the new tax regime and increased the standard deduction, you will still have to pay tax on earning 10 lakhs. You cannot avail tax exemption by investing under the new tax regime. In such a situation, let us know how much tax will have to be paid if your income is Rs 10 lakh annually and you choose the new tax regime? 

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ITR Filing: It is necessary to file income tax returns for the financial year 2023-24 and assessment year 2024-25 by July 31, 2024. After this, you will have to pay a penalty for filing the return.

But there are some people who will not have to pay any tax if they file ITR after the deadline. We are giving you information about this.

Also Read: Govt issued guidelines for issuing CGHS cards for central government employees and pensioners

If a person does not have any tax liability, then you will not have to pay any penalty for filing the return even after the deadline. According to the old tax regime, you will not have to pay any penalty for an annual income of Rs 2.50 lakh. Whereas for a person above 60 years of age, the limit is Rs 3 lakh.

Whereas for senior citizens above 80 years of age, the exemption limit is Rs 5 lakh. According to the new tax regime, the benefit of tax exemption is available on income of Rs 3 lakh.

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The government believes that this is a more effective way of providing direct relief to the people instead of schemes. The government is thinking of giving you more money in your hands. It may sound a little strange, but it is true. In the budget coming in July, the government can change the tax rules. Till now, those who earn Rs 3 lakh do not have to pay any tax. However, now the government is considering increasing this limit to Rs 5 lakh.

This means that the government is thinking of increasing the exemption limit. But, this rule will apply only to those who choose the new tax system. In the old tax system, you get many types of exemptions. In the new system, the tax is less and there are no exemptions. The government hopes that this will bring more money in the hands of the people. They will be able to buy more goods. This will strengthen the country’s economy. The final seal will be put on it close to the budget.

Also Read: MCD Property Tax: 10% discount on paying property tax by 30 June. know everything

The exemption limit in income tax is the maximum income amount on which you do not have to pay income tax. This limit depends on many factors including your age, residential status and the claim made on your behalf.

Demand to reduce the highest tax rate

A section of the industry has also requested the government to reduce the highest tax rate in the new tax system from 30% to 25%. But the chances of this happening are very low. A government official said that there is little possibility of any change in the tax for those earning more because the need right now is to provide relief to those who earn less.

The government does not want to make any changes in the old tax system either. This is because the government wants more and more people to adopt the new tax system. In the new tax system, those earning more than Rs 15 lakh have to pay the maximum tax of 30%, whereas in the old system this limit is Rs 10 lakh.

What is the government’s intention?

The government wants to give more money to the people by reducing taxes. Instead of increasing expenditure on subsidies and other schemes. This is because many times the full benefit of these schemes does not reach the needy people.

A government official said that boosting the economy by cutting taxes is better than spending money on welfare schemes. This is because sometimes the money is not used properly in the schemes. The full benefit does not reach the people. There has been a decrease in the purchasing power of the people in the country, which is the lowest in the last 20 years.

This is happening at a time when the Indian economy is growing rapidly. In such a situation, the government wants more money in the hands of the people so that they can buy more goods and the economy gets more momentum.

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The time has come to file Income Tax Return (ITR Filing 2024). Many taxpayers want to change the tax regime while filing returns. Let us tell you that if you have not selected the tax regime, then the automatic new tax regime will be selected or will have been done.

Can taxpayers who want to change the tax regime do so now? Come, let us know the answer to this question.

default tax regime
In Budget 2023, Finance Minister Nirmala Sitharaman had made changes in the Income Tax slab. He had announced the new tax regime. In this, Rs 3 lakh annual income is tax free and the tax has been rebooted to Rs 5 lakh. Let us tell you that the new tax regime is the default regime.

If the taxpayer has not yet selected the tax regime, then tax will be paid under the automatic new tax regime. Apart from this, the company will also deduct TDS under the new tax regime.

How To Switch Tax Regime?
The Central Board of Direct Taxes (CBDT) has not yet given any information regarding whether the tax regime can be changed. This clearly means that whether the tax regime can be changed or not is not yet clear.

However, regarding this, tax experts say that the company gives the option to the taxpayer to settle the tax. If the company does not give this option to the taxpayer then there is no remedy for it.

At the same time, many experts say that the taxpayer can select the tax regime when he files ITR. That is, while filing returns, taxpayers can choose the regime as per their choice.

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Let us tell you that if you have not selected the tax regime, then automatically the new tax regime will be selected.

Taxpayers who want to change the tax regime can do so now? Come, let us know the answer to this question.

Default tax regime

In Budget 2023, Finance Minister Nirmala Sitharaman had made changes in the Income Tax slab. He had announced the new tax regime. In this, Rs 3 lakh annual income is tax free and the tax has been rebooted to Rs 5 lakh. Let us tell you that the tax regime is the default regime.

Also Read: Income Tax Saving Tips: You will not have to pay even a single rupee tax on income up to Rs 10 lakh, know how to save

If the taxpayer has not yet selected the tax regime, then tax will be paid under the automatic new tax regime. Apart from this, the company will also deduct TDS under the new tax regime.

How To Switch Tax Regime?

The Central Board of Direct Taxes (CBDT) has not yet given any information regarding whether the tax regime can be changed. This clearly means that whether the tax regime can be changed or not is not yet clear.

However, regarding this, tax experts say that the company gives the option to the taxpayer to settle the tax. If the company does not give this option to the taxpayer then there is no remedy for it.

At the same time, many experts say that the taxpayer can select the tax regime when he files ITR. That is, while filing returns, taxpayers can choose the regime as per their choice.

The post Tax Regime Change: Can I change New Tax Regime to Old Regime? Know everything here first appeared on Rightsofemployees.com.

Benefits in New Tax Regime: The deadline for filing and submitting Income Tax Return (ITR) is now approaching. In such a situation, many taxpayers might be wondering whether they should go with the new tax system or continue with the old tax system. This dilemma will be more in the minds of those who have recently retired and have started getting pension.

In fact, in the Union Budget 2023-24, the income tax slab was changed under the new tax regime keeping in mind the common taxpayers. With this, the tax exemption limit has been increased from Rs 5 lakh to Rs 7 lakh.

Talking about senior citizens or retired pensioners, there are many pensioners who have not changed their tax regime. There will be more dilemma in their mind as to what decision to take. Generally, after retirement, pension becomes less as compared to salary. Under the new tax system, the tax exemption limit has increased.

Due to which many times they find the new system better. On the other hand, there is a facility to avail tax exemption in the old tax system, due to which attention is also attracted there. In such a situation, you should take a decision after knowing the positive and negative of both the systems.

You can choose any option
Senior citizens also have the facility to choose any option in the new or old tax system while filing income tax returns. No change has been made in this rule. According to the Income Tax Department, if a person’s age is 60 years or more, but less than 80 years, he is considered a senior citizen under the income tax rules. If the age is more than 80 years then they are considered super senior citizens.

Same rates for all in the new system
In the new tax system, the tax rates are the same for all individuals and senior citizens above 60 years to 80 years and super senior citizens above 80 years. Senior citizen taxpayers are also required to pay additional health and educational cess at the rate of 4 percent of the total income tax liability.

Under Section 87A, the tax rebate limit has been increased to Rs 7 lakh. This means that people with annual income up to Rs 7 lakh will no longer have to pay any income tax in the new tax regime. In the old tax regime, this benefit is available only on income up to Rs 5 lakh. For the first time in the new tax regime, the benefit of standard deduction is also being given.

Slab and tax in the new tax system

• Income Rs 3 lakh: No tax
• Income more than Rs 3 lakh to Rs 6 lakh: 5% tax
• More than Rs 6 lakh to Rs 9 lakh: 10% tax
• More than Rs 9 lakh to Rs 12 lakh: 15% tax
• More than Rs 12 lakh to Rs 15 lakh: 20% tax
• Above Rs 15 lakh: 30% tax

Benefits in the new system
Under the new tax system, senior citizens can claim a maximum deduction of Rs 50,000 on health insurance premium under Section 80D. If this expenditure is made for dependent senior citizens, then the eligibility for this is Rs 1 lakh in a financial year.

Senior and super senior citizen taxpayers are allowed a maximum deduction of Rs 50,000 under Section 80TTA for interest income from savings bank accounts. For general taxpayers it is Rs 10,000.

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Earlier in the new tax regime there was no provision for standard deduction. At the same time, after Budget 2023, the benefit of discount up to Rs 50,000 is available.

Everyone will get the benefit of deduction
The special advantage of this deduction is that no matter which tax slab the taxpayer falls under, he will get the benefit of this exemption.

Employed people are getting discounts
In the new tax regime, employed people get all kinds of perks or allowances for travel, transport, conveyance and office work. You get the benefit of tax exemption on them.

Discount on gifts
Apart from this, you will also get the benefit of discount on gifts up to Rs 50,000. If you are paying home loan for a house given on rent, then you will also get rebate on its interest.

There will be discount in NPS
Those investing in NPS can claim their tax deduction. Along with Voluntary Retirement Scheme, there will also be exemption on gratuity and leave encashment.

How much is the tax on which slab?
In the new tax regime, there is no tax on annual salary of Rs 0-3 lakh. Apart from this, 5% tax is levied on salary between Rs 3 to 6 lakh. 10% tax is applicable on income from 6 to 9 lakhs, 15% on 9 to 12 lakhs, 20% on income from 12 to 15 lakhs and 30% tax on income above 15 lakhs. Apart from this, 4% is charged as Health and Education Cess.

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Rules change from 1 April 2024: The new business year will start from 1 April 2024. With the beginning of the new business year and the fourth month of 2024, there will be changes in many financial rules.

Let us tell you that many financial rules change at the beginning of every month. These financial rules have a direct impact on the general public. Today we will tell you which financial rules are changing from April 2024.

Fastag KYC is mandatory

The rules related to Fastag are changing from April 1, 2024. If you do not update Fastag KYC by March 31, 2024, you may face problems from next month.

Actually, the bank will deactivate Fastag without KYC. This means that even if there is balance in Fastag, payment will not be made through it. NHAI has made Fastag KYC mandatory.

PAN-Aadhaar link

It has been made mandatory to link PAN Card with Aadhaar Card. The deadline for linking PAN with Aadhaar (Pan-Aadhaar Link) is 31 March 2024. If PAN is not linked to Aadhar card then the PAN number will be cancelled.

That means PAN will not be used as a document. For linking PAN with Aadhaar after April 1, the user will have to pay a penalty of Rs 1,000. To avoid penalty, the user should link his PAN card with Aadhaar by March 31, 2024.

EPFO’s new rule

EPFO rules are also going to change from April 1, 2024. Actually, Employees Provident Fund Organization is going to implement the new rule from next month. According to this rule, now after changing job, the PF account will be transferred in auto mode.

This means that now the user will not need to give a request to transfer the account. After the implementation of this rule, the problems of the users will be reduced to some extent.

SBI Credit Card

Those users who have SBI Credit Card, let them know that there is going to be a change in the rules of Credit Card from April 1, 2024.

If you make rent payment through SBI credit card, then let us tell you that from April 1, you will not be given any reward point on rent payment. This rule will be valid on some credit cards from April 1, while on others it will be applicable from April 15, 2024 onwards.

LPG gas price

LPG Cylinder Price is updated across the country on the first of every month. LPG prices will also be updated on April 1, 2024.

However, the possibility of change in their prices between Loksabha Election 2024 is very less.

New tax regime

If the taxpayer has not yet selected the tax regime, then he has only a few days left. Actually, from April 1, 2024, the new tax regime will become the default tax regime.

That means the taxpayer will automatically have to pay tax as per the rules of the new tax system.

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The salaried class is expecting the Standard Deduction to increase over a period of time. It has been almost five years since the standard deduction was revised. The standard deduction was last changed in the year 2019. The budget of 2024 will be only an interim budget and the Finance Minister has already said that there will be no major announcements in the budget. There are reports that the government may increase the standard deduction to Rs 90,000 in the budget.

Will the standard deduction increase to Rs 90,000?

Currently the standard deduction limit is Rs 50,000. Many tax experts believe that this will now increase to Rs 90,000. That is, the government can increase this limit from Rs 50,000 to Rs 90,000 in the interim budget. If this happens, it can prove to be a big saving for taxpayers.

What is standard deduction?

Standard deduction is a flat deduction the salaried class can avail of from taxable income without showing any expenditure or saving. Its objective is to achieve parity between taxpayers who receive income through salaries and income from business. Last year, the government also added standard deduction to the new tax regime. At present, standard deduction is available in both the old tax regime and the new tax regime.

This is the history of standard deduction

Standard deduction was first introduced in India in 1974. According to the history of standard deduction, this deduction is given to salaried class and pensioners to cover their expenses. It was removed in 2004–2005 to simplify taxation. It was then re-introduced in the Union Budget in 2018 and fixed at Rs 40,000 for salary class employees and pensioners.

In the interim budget presented on 1 February 2019, the standard deduction limit was increased to Rs 50,000. However, this was limited to the old tax system. In Budget 2023, it was combined with the new tax regime. Standard deduction of Rs 50,000 was allowed in the new tax regime. Now this is available on both new and old tax regime.

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At the same time, the income tax payer who chooses the new tax system does not get the benefit of most of the tax exemptions and deductions. An attempt has been made to make the annual income of up to Rs 7 lakh tax free for those adopting the new income tax regime. Apart from this, there are some deductions which salaried employees can also get in the new tax regime.

Income tax payers choosing the new tax system can definitely avail the benefit of two deductions. One is standard deduction and the other is deduction on the contribution made by the employer in NPS. By availing the benefit of both these deductions, a salaried person can significantly reduce his tax liability. If his total annual income is Rs 8 lakh then he will not have to pay even a single penny as income tax.

Standard deduction

Standard deduction is the deduction which is deducted from the income of the taxpayer and after that tax is calculated on the remaining income. Employed individuals get a tax deduction of up to Rs 50,000 as standard deduction, while family pensioners are given a tax deduction of Rs 15,000 as standard deduction.

Suppose the annual income of a working person is Rs 8 lakh. In such a situation, if you get the benefit of standard deduction up to Rs 50,000 in the total package, then its tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh. No documents have to be submitted to avail this discount.

Income taxpayers who have adopted the new tax system can also now avail the benefit of standard deduction. While filing Income Tax Return or ITR, standard deduction is claimed under the head Income from salaries/pension under Section 16(ia) of the Income Tax Act. Family pension is kept under the head “Income from other sources” in ITR.

Deduction on amount deposited in NPS

Under the new tax regime, employed employees also get the benefit of standard deduction on the amount deposited in the National Pension System (NPS). To get this, certain conditions must be fulfilled. The first condition is that this amount in NPS should be deposited by the employer in the Tier-1 NPS account of his employee. Secondly, this amount should not be more than 10 percent of the salary of private sector employees.

For government employees this limit is 14 percent. Salary means the amount made by combining basic salary and dearness allowance. Employed people can avail the benefit of this deduction under Section 80CCD (2) of the Income Tax Act. This amount deposited in the NPS account will be mentioned in Part B of Form 16.

Income up to Rs 8 lakh can be tax free

After availing the benefit of both these deductions, the income of a working person earning Rs 8 per year can be tax free. After deducting Rs 50,000 as standard deduction from the annual income of Rs 8 lakh, his taxable income will be Rs 7.5 lakh. Now if the employer deposits Rs 50 thousand in the employee’s Tier-1 NPS account, then the taxable income will further reduce to Rs 7 lakh. On which no tax will have to be paid under the new tax regime.

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Is there scope for changes in the old tax?

In the budget, everyone wants that some changes should be made in the old income tax regime. According to the new tax regime, the taxable income limit should be increased to Rs 7 lakh. The government’s focus is that taxpayers choose the new tax regime, so there is less scope for changes in the old tax regime. The government also would not like to reduce the income from income tax. So the government will have to maintain a balance on both sides.

The expectations of taxpayers are that the limit in the old tax regime should be increased, but the chances of this happening are less. Most of the taxpayers are hoping that the government increases its limit to Rs 7 lakh.

There should be discount on home loan

To boost the real estate sector and fulfill people’s dream of owning their own home, the government needs to increase the rebate on home loans. The government needs to increase the rebate on home loan interest to Rs 5 lakh. This will also give a boost to the real estate sector. Also, people will be more motivated to buy their house.

Some changes are needed in the new tax regime

Salary class home loan takers are reluctant to migrate from the old tax regime to the new tax regime. In such a situation, what should the government do to target the salary class? On this he said that the government should include exemption for home loan taxpayers in the new tax regime. More people would like to move towards the new tax regime.

The post Budget 2024: Can home loan buyers get exemption in the new tax regime? first appeared on Rightsofemployees.com.

Many changes made in the new tax regime-

The new tax regime was announced for the first time in Budget 2020. The government had made this default tax regime in March 2023. The Finance Minister had announced that if a taxpayer does not choose any tax regime on his own, then in such a situation TDS will be deducted as per the first tax regime.

Only if you choose the old tax regime, your tax will be calculated according to that regime. Some changes were made in the new tax regime this year. After this, the basic exemption limit increased from Rs 2.5 lakh to Rs 3 lakh. The tax exemption limit has now increased from Rs 5 lakh to Rs 7 lakh. The standard tax exemption limit is Rs 50,000. In this case, you will get a total rebate of Rs 7.5 lakh in the new tax regime.

Rules changed for Debt Funds investors

This year, the Income Tax Department gave a big blow to Debt Fund investors and removed the tax exemption on Long Term Capital Gain (LTCG). In such a situation, the income earned through long term capital gain will now be included in the income and you will have to pay tax on it as per the tax slab. This new rule has come into effect from April 1, 2023.

Reduction in surcharge rate of high net individuals

This year, Finance Minister Nirmala Sitharaman gave a big relief to the people earning more than Rs 5 crore and made a big cut in the surcharge rate. It has been reduced from 37 percent to 25 percent. In such a situation, the average tax on high net individuals has reduced from 42.74 percent to 39 percent.

Tax will be levied on life insurance amount

The Central Government has changed the rules of tax on the maturity amount of life insurance policy. Earlier this amount was completely tax free, but now taxpayers will have to pay tax on premium of more than Rs 5 lakh.

Capital gains on property sale-

The central government has fixed the limit of exemption on income earned through property sale at Rs 10 crore. In such a situation, tax payers can claim income up to Rs 10 crore on income from residential property under sections 54 and 54F of Income Tax.

Old IT returns can be deleted

The Income Tax Department provides the facility to taxpayers to delete unverified IT returns of old years. In such a situation, you can easily delete those IT returns of previous years whose verification has not been completed.

30 percent tax on online gaming

The central government has decided to impose 30 percent tax on earnings through online gaming this year. This rule has come into effect from March 31, 2023. Earlier, TDS was levied on annual income of more than Rs 10,000, which has now been increased to 30 per cent.

The post New Income tax rules: Many income tax rules changed this year, check details first appeared on Rightsofemployees.com.

Crores of people file income tax returns in the country. At the same time, the last date for filing income tax return has come. By 31 July 2023, taxpayers will have to disclose their earnings made in the financial year 2022-23. On the other hand, if someone does not file income tax return by the due date, then those people may also have to pay a fine. At the same time, more than 6 crore people have filed their ITR.

On the other hand, filing of income tax return this time is very special because this time a good news has also been given to the people by the Modi government. In fact, in Budget 2023, an important announcement was made by Union Finance Minister Nirmala Sitharaman and people were exempted from the tax filing limit. Crores of people have also benefited from this exemption.

New tax regime

Actually, the Modi government had increased the exemption in the income tax limit in the new tax regime. It was announced in Budget 2023 that if a taxpayer files income tax return under the new tax regime, then he will get exemption on annual income up to Rs 7 lakh. This means that if people file income tax returns under the new tax regime, they will not have to pay any tax up to an annual income of Rs 7 lakh.

Along with this, the Modi government has also given the people the benefit of standard deduction in the new tax regime. If you work on salary, then people will also get standard deduction of Rs 50 thousand from the new tax regime. In such a situation, along with tax exemption on annual income of Rs 7 lakh, people will also get a standard deduction of Rs 50 thousand. In such a situation, people can get tax exemption from the new tax regime up to an income of up to Rs 7.5 lakh annually.

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In the budget 2023-24, the Modi government at the center has made many changes to make the new tax regime attractive. Since then, the interest of many people has increased in this tax regime. On Friday, Finance Minister Nirmala Sitharaman has once again praised the new tax regime. The Finance Minister said that the new tax regime has given maximum relief and benefits to the middle class people. He said that people of this class are getting tax exemption on an annual income of Rs 7.27 lakh.

Those earning a little more than Rs 7 lakh will also get tax exemption

The Finance Minister has said that the Modi government at the Center is trying to take every section of the country along. In such a situation, keeping in mind the middle class of the country, the government has given income tax exemption to people earning up to Rs 7 lakh. This exemption is available under the new tax regime.

After this decision of the government, many people of the country did not believe in it. There was a question in the mind of some people that if a person’s income is more than Rs 7 lakh, will he have to pay tax? In such a situation, we talked continuously to consider this matter. After this, it was decided that no tax would have to be paid if the income is just a little more than Rs 7 lakh. For example, a person earning Rs 7.27 lakh annually will not have to pay any tax.

Standard deduction available on income of Rs 50,000

Nirmala Sitharaman also said that earlier people were not getting the benefit of standard deduction in the new tax regime, about which many complaints were coming. In such a situation, keeping in mind the needs of the people, we have also made a provision for standard deduction up to Rs.50,000.

The budget for MSMEs has been increased manifold

Praising the steps taken by the government for Micro, Small and Medium Enterprises, the Finance Minister said that its budget has increased 7 times in the last 9 years. In the financial year 2013-14, this budget was Rs 3,185 crore, which has now been increased to Rs 22,138 crore in 2023-24. This shows how committed the government is to promote the small industries of the country. Along with this, he said that under the public procurement policy, the government is making 33 percent of the total purchases from MSMEs.

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In the case of individuals, the tax is not levied at a flat rate but as per the slab system. People have to file income tax return and pay applicable tax if their income exceeds the minimum limit.

Income tax return

In the old tax regime, the income tax slab for the common people has been divided into three categories. These include people below 60 years of age, people between 60 and 80 years of age and people above 80 years of age. However, there is nothing like this in the new tax regime. At the same time, people have to file income tax returns according to different tax slabs.

While tax slabs

file income tax returns according to the new and old tax regime, people have to file different taxes on different incomes. However, 5% tax is also paid according to the income of the people. The rate of 5 percent is the lowest tax rate in the income tax slab.

Old Tax Regime – New Tax Regime

If a person files income tax return according to the old tax regime and the age of that person is less than 60 years, then that person can get income from Rs. 2.5 lakh per annum to Rs. 5 lakh per annum. 5% tax will have to be paid. On the other hand, if a person files income tax return from the new tax slab and the income of that person is between Rs 3 lakh to Rs 6 lakh annually, then that person will have to pay 5% income tax.

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Finance Minister Nirmala Sitharaman had made income up to Rs 7 lakh tax free while making changes in the new tax regime. While making changes in the new tax regime, the government has exempted income up to Rs 7 lakh from tax. Now the government has given another relief to the taxpayers. Under the Finance Bill 2023, tax exemption has also been given on income above Rs 7 lakh. You think that the government has changed the slab or changed the taxable income, let us tell you that nothing like this has happened. The government has given only marginal relief to those people whose income is a little over Rs 7 lakh.

Income above Rs 7 lakh also out of tax net

The Lok Sabha has approved the Finance Bill 2023. After this amendment, taxpayers have got some relief under the new tax regime. The new rule will come into force from 1 April 2023. Giving detailed information about the new relief, Finance Minister Nirla Sitharaman said that under the new tax regime, if a taxpayer’s annual income is Rs 7 lakh, then he does not have to pay any tax.

It is exempt from tax, but if someone’s income becomes Rs 7,00,100, then he will have to pay Rs 25,010 after calculating under the tax slab. That is, for an increase of only Rs 100 in income, taxpayers have to pay tax of Rs 25 thousand 1 hundred. The government has given minor relief to such taxpayers. So that those people can get relief, whose income is slightly more than the scope of tax free income.

It should be mentioned here that the information has not yet been received on how much this relief will be given. The government has proposed to give minor relief in the Finance Bill.

Minor relief to these people in income tax

To clear the picture of this relief, let us understand with an example. Suppose your income is Rs 7,00,100 means Rs 7 lakh 100. That is, his income is only Rs 100 more than the tax free income. That is, because of only Rs 100, he has to pay tax of Rs 25,010.

The government has given relief to such people by giving minor relief. Under the new proposal, if your income is Rs 7,00,100, then they will not have to pay tax of Rs 25,010, rather they will have to pay only Rs 100 tax.

This relief was found in the budget

In the announcement of Budget 2023, the government gave relief to the taxpayers who adopted the new tax regime. The government made income up to Rs 7 lakh tax free. The government’s intention behind this was that more and more people should adopt the new tax regime. It is also important to know here that no exemption is given on investment in the new tax regime.

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Finance Minister Nirmala Sitharaman has made major changes in the new tax regime in this budget, after which taxpayers are getting the benefit of huge rebate while paying taxes. Today we will tell you how you can take advantage of more exemption while paying tax and which tax regime is best for you.

Which tax regime to choose?

At this time, you have the option to choose the tax regime, whether you select the new tax regime or choose the old tax regime. In the new tax regime, you will get the benefit of exemption up to 7 lakhs. The new tax regime was launched by the government in the year 2020 and in this year’s budget, the Finance Minister has defaulted this tax system, after which you will have to be very careful while paying taxes.

These people will not have to pay tax in the new tax regime

Talking about the new tax regime, there will be no tax on income up to Rs 3 lakh. Along with this, those earning up to 7 lakhs will get the benefit of tax rebate, after which even those people will not have to pay tax. Along with this, the tax slab has also been reduced.

How many slabs are there in the new tax regime?

0 to ₹3 lakh = 0
₹3 lakh to ₹6 lakh = 5 per cent
₹6 lakh to ₹9 lakh = 10 per cent
₹9 lakh to ₹12 lakh = 15%
₹12 lakh to ₹15 lakh = 20 per cent
Above ₹15 lakh = 30%

Old tax regime Apart from this, if we talk about the old tax system, then those with income up to 2.5 lakh get the benefit of exemption. Apart from this, those with income between 2.5 to 5 lakh have to pay 5% tax, but these people also get the benefit of exemption of up to Rs 12,500. In this, you have to pay tax up to 5%, 20% and 30%. Let us tell you that in the old tax regime, you get the benefit of exemption under section 80C, in which you can save tax.

Tax slabs of old tax regime-

Old tax regime (for individual taxpayers below 60 years)

0 to ₹2.5 lakh = 0
₹2.5 lakh to ₹5 lakh = 5 per cent
₹5 lakh to ₹10 lakh = 20 per cent
Above ₹10 lakh = 30%

Find out how much tax will have to be paid from the tax calculator

If you also want to know where you will have to pay less tax while choosing the tax regime, then for this you can take the help of tax calculator. Let us tell you that the Income Tax Department has made the new tax regime the default, after which a calculator has also been released, so that taxpayers do not face any problem in calculation. With this, you can find out that in which tax regime, how much tax you will have to pay. Let us tell you that you will also find this calculator on the official website of Income Tax.

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Nirmala Sitharaman had announced that the new taxation system imposed by the government would be in default from the financial year 2023-24. Under the new system, tax exemption can be obtained on income of Rs 7 lakh annually. Taxpayers with annual income up to Rs 7 lakh will save Rs 33,800 in taxes after increasing the exemption under the new income tax regime through the Finance Minister.

Income Tax

There are some benefits in the new tax regime but there is no exemption on any investment in it. However, standard deduction has definitely been added to the new tax regime. On the other hand, if you want investment or other exemption, then you will have to file tax according to the old tax regime. Many exemptions are available in the old tax regime. Today we are going to tell you about it…
Deductions available under old tax regime

1. Standard Deduction: Rs.50000 for salaried individuals.

2.Section 80CCD(1B): Additional deduction up to Rs 50,000 for deposits in NPS account.

3.Section 80TTA: This section provides a deduction of a maximum of Rs 10,000 on interest income from savings account of a bank, co-operative society or post office for an individual or a HUF.

4.Section 80D: It allows deduction on health insurance premium.

5. Section 80G: Donations made to eligible trusts and charitable institutions are eligible for deduction.

6. Section 80C: Invest in EPF and PPF, ELSS, life insurance premium, home loan repayment, SSY, NSC and SCSS and get exemption.

Taxpayers should note that if you are an employee and fail to choose between the new-old tax regime, TDS will be deducted at the new tax regime rates. The matter has become clear from a circular of the Central Board of Direct Taxes.

It said, “If the notice is not given by the employee, it will be deemed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime. shall deduct tax at source on the income under section 192 of the Act, in accordance with the rates provided under sub-section (lA) of section 115BAC.”

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Today we are going to tell you 4 advantages of the new tax system, about which many people will not be aware. Keeping these things in mind, you can choose any one tax regime before filing the tax return. So let’s know about the four major changes in the new tax regime.

New tax slab

The government wants more and more people to shift to the new tax regime. That’s why changes have also been made in the tax slab in the new tax regime. There are 6 tax slabs in the new regime. In this, no tax has to be paid on income up to Rs 3 lakh. After this, 5 percent tax is being increased on every increase of Rs 3 lakh.

Standard Deduction

Earlier, standard deduction was available only to people in the old tax regime. Now those opting for the new tax system will also get its benefit. Taxpayers will get standard deduction of 50,000. This means that apart from Rs 3 lakh and up to Rs 50,000, exemption will be given without any documents. Pensioners can also claim standard deduction of up to Rs 15,000.

Discount limit increased

In the new tax regime, the basic exemption limit has been increased to Rs 3 lakh. It was earlier Rs 2.50 lakh. That is, people earning up to Rs 3 lakh have been freed from the worry of paying tax. In the old tax regime, this exemption is only up to Rs 2.50 lakh.

Tax exemption up to 7 lakhs

Although in the new tax regime, income up to 3 lakhs has been excluded from the tax slab, but even if a person’s income is not reaching Rs 7 lakhs, he will not have to pay any tax. Not only this, if standard deduction is also added, then income up to Rs 7.50 lakh has been made tax-free. However, on earning more than this, tax will have to be paid as per the tax slab. For example, no tax up to Rs 7.5 lakhs, but after 7.5 lakhs, the calculation of tax will start from the slab after 3 lakhs.

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These include New Tax Regime and Old Tax Regime. While filing tax in both the tax systems, different tax slabs have been given, according to which tax has to be filed.

Income tax return

While presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman had announced several changes in income tax. Under these changes, the tax regime was also changed. Along with this, the income tax slabs were also changed. While announcing the change in the new tax regime, the Modi government has kept zero tax up to Rs 3 lakh.

ITR

After this, people will have to pay 5% tax on income of Rs 3-6 lakh annually. On the other hand, if someone’s income is 6-9 lakh rupees, then these people will have to pay 10% income tax. If someone’s annual income is Rs 9-12 lakh, then these people will have to pay 15% tax. After this, those people whose income is 12-15 lakh rupees, then those people will have to pay tax of 20%. Apart from this, people whose income is more than Rs 15 lakh will have to file 30% tax.

Old tax regime

On the other hand, if we talk about the old tax regime, then individual taxpayers below the age of 60 years will not have to pay any tax up to Rs 2.5 lakh. After this, these people will have to pay 5% tax on annual income of Rs 2.5 to 5 lakh. At the same time, 20 percent tax will have to be paid on the annual income of Rs 5-10 lakh. On the other hand, those whose income is more than Rs 10 lakh annually, they will have to pay tax of 30 percent.

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To make the new tax regime attractive, the government has increased the tax exemption limit up to Rs 7 lakh. It is a matter of great relief for the employed and middle class people. Those whose annual income is less than Rs 7 lakh can save tax on their entire income in this regime. But, if I tell you that this range is not 7, but 7.5 lakh rupees, then it will not be believed.

In the financial year 2023-24, the government has given direct exemption regarding income tax slab after many years. Although the new tax regime has been implemented two years ago, but in true sense its days are now over. In the budget, it has been announced to implement the new tax regime by default. Till now the old tax regime was implemented by default. This means that now you do not tell your HR which regime to choose, then by default your income tax calculation will start with the new regime. If you want to pay tax from the old regime, you must first inform your employer.

Who will get the benefit

When the Finance Minister gave information on personal tax during the budget speech, he made income tax-free up to Rs 7 lakh in the new tax regime. Earlier this limit was 5 lakh rupees. The confusion is that if the income of Rs 7 lakh is made tax free, then how much tax will have to be paid by those earning Rs 7.5 lakh. The government increased the tax rebate limit from Rs 5 lakh to Rs 7 lakh and also gave a standard deduction of Rs 50,000. In this way, the total income up to Rs 7.5 lakh became tax free.

If earning is more than 7.5 lakh

If someone’s annual income is more than Rs 7.5 lakh and is adopting the option of savings, then he should stay away from the new tax regime. Actually, in the old regime, tax exemption is given only up to 5 lakhs. Tax has to be saved in the form of investment on income more than this.

Those who are not able to invest in rising inflation, they should adopt the new regime. In this, even after taking tax exemption of 7.5 lakhs, if your income is more, then the tax rate will be less on it. Apart from this, tax up to 3 lakh has been kept nil in the new regime, due to which you will be able to save several thousand in the form of tax.

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Those whose annual income is less than Rs 7 lakh can save tax on their entire income in this regime. But, if I tell you that this range is not 7, but 7.5 lakh rupees, then it will not be believed.

Actually, in the financial year 2023-24, after many years, the government has given direct exemption regarding Income Tax Slab. Although the new tax regime has been implemented two years ago, but in true sense its days are now over. In the budget, it has been announced to implement the new tax regime by default.

Till now the old tax regime was implemented by default. This means that now you do not tell your HR which regime to choose, then by default your income tax calculation will start with the new regime. If you want to pay tax from the old regime, you must first inform your employer.

Who will get 7 lakh tax exemption

In the budget, the Finance Minister had told that in the new tax regime, the direct exemption of income tax will be 7 lakh rupees. However, tax exemption will not be available on any kind of investment in this regime. That is, such job professionals who are not able to make any investment, now they will not have to pay tax on income up to Rs 7 lakh. But, in the new regime also, the total rules of income tax exemption apply, which give you a chance to avail tax exemption even after the scope of 7 lakhs.

How to save 50 thousand more In order to increase the scope of tax exemption to more than 7 lakhs in the new regime, you will have to claim Standard Deduction. Under the Income Tax Act, every salaried person is given a rebate of Rs 50 thousand in the name of standard deduction. But, its benefit is available only to the working people. So, if you are opting for the new tax regime this year, do not forget to claim standard deduction while filing the next ITR.

Earning is more than this, so if someone’s annual income is more than Rs 7.5 lakh and is adopting the option of savings, then he should stay away from the new tax regime. Actually, in the old regime, tax exemption is given only up to 5 lakhs. Tax has to be saved in the form of investment on income more than this.

Those who are not able to invest in rising inflation, they should adopt the new regime. In this, even after taking tax exemption of 7.5 lakhs, if your income is more, then the tax rate will be less on it. Apart from this, tax up to 3 lakh has been kept nil in the new regime, due to which you will be able to save several thousand in the form of tax.

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The Lok Sabha has approved the Finance Bill 2023. In this, through amendment, some relief has been given to the taxpayers under the new tax regime. The new tax regime will come into effect from April 1.

No tax up to Rs 7,00,000

Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7,00,000, he does not have to pay any tax, but if the income is Rs 7,00,100, then 25,010 Have to pay tax of Rs. Due to this additional income of Rs 100, the taxpayers have to pay tax of Rs 25,010. Therefore, a marginal relief has been proposed, so that the tax payable by the person should not exceed the increased income from the tax free income of Rs.7,00,000. In the above case, the income in excess of Rs.7,00,000 is Rs.100, so the same amount should be charged to tax.

Finance Bill amended to provide relief to taxpayers

Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, said the amendment in the Finance Bill has been made to provide some relief to individual taxpayers whose income is marginally higher than the tax free income. In the budget for the financial year 2023-24, it was announced that the taxpayers adopting the new tax regime, whose annual income is up to Rs 7,00,000, will not have to pay tax. Experts believe that this step was taken to motivate the salaried class taxpayers to adopt the new tax regime. No exemption is given on investment in the new tax regime.

Who will get relief

Now the government has made up its mind to give some more relief to these taxpayers through amendment in the Finance Bill. However, the government has not mentioned to what extent taxpayers having income above Rs 7,00,000 would be eligible for this relief. Tax experts have calculated that individual taxpayers whose income is up to Rs 7,27,777 can get the benefit of this provision.

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In such a situation, now you have to tell your employer in advance that you would like to file tax in any regime. If you do not choose any tax regime yourself, then your ITR will automatically be filed in the new tax regime. Apart from this, the tax slab of the new tax regime has also been changed.

Now there are only six slabs in the new tax regime. Currently the highest tax rate in India is 30% and surcharge and education cess are also levied on it. These tax slabs decide who will pay how much tax on how much income. Let us see who will have to pay maximum tax in the old and new tax regime.

Old vs New Tax Regime: Income Tax Slab for AY2023-24

Who will have to pay maximum tax under the old tax regime?

In the old tax regime, the highest tax rate is for those earning above 10 lakhs. If your income is above 10 lakhs and you choose old tax regime, then you will have to pay tax at the rate of 30%. In the old tax regime, all such individual taxpayers in the age group of 60 years to 80 years come under 30%, whose income is above 10 lakhs.

Who will have to pay more tax in the new tax regime?

The highest rate in the new tax regime is also 30%. But this tax rate is for those above 15 lakhs. That is, if your annual income is above 15 lakhs, then 30% of your income will be taxed. In the old tax regime, where people above 10 lakhs pay more than 30% tax, in the new regime, 10% tax is levied on those above 10 lakhs to 12 lakhs, and 20% on the income from 12 lakhs to 15 lakhs. Taxes apply.

How much will be the surcharge?

Surcharge is a separate charge on income tax, a surcharge is levied on the income which is calculated according to the tax rate.

– 10% – ₹50 Lakh – ₹1 Crore
– 15% – ₹1 Crore – ₹2 Crore
– 25% – ₹2 Crore – ₹5 Crore
– 37% – Above ₹5 Crore

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This means that all people with income up to Rs 3 lakh will not have to pay income tax. However, this benefit will be available only to taxpayers opting for the new tax regime. Taxpayers have got relief under the new tax regime.

Let us tell you that under the new tax regime, if a taxpayer’s annual income is Rs 7 lakh, then he will not have to pay any tax. While presenting the budget, Finance Minister Nirmala Sitharaman had announced tax-free income up to Rs 7 lakh while making changes in the new tax regime.

Under the new tax regime, the government has exempted income up to Rs 7 lakh from tax. The aim of the government to make income up to Rs 7 lakh tax free is that more and more taxpayers should adopt the new tax regime.

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For this, amendments have been made in the Finance Bill. In the amendment, it has been provided that persons earning income slightly more than the tax free income of Rs 7 lakh will have to pay tax only on the additional income.

The Lok Sabha has approved the Finance Bill 2023. In this, some relief has been given to taxpayers under the new tax regime through amendment. The new tax regime will come into effect from 1 April.

These taxpayers will get relief

Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7 lakh, then he would not have to pay any tax. But if the income is Rs 7,00,100, then tax of Rs 25,010 has to be paid on it. Due to this additional income of Rs 100, taxpayers have to pay tax of Rs 25,010.

That is why it has been proposed to give a minor relief so that the tax paid by the person should not exceed the increased income from tax free income of Rs 7 lakh. In this case, the income in excess of Rs 7 lakh is Rs 100, so tax should also be levied on the same amount.

Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, said the amendment in the Finance Bill has been made to provide some relief to individual taxpayers whose income is marginally higher than the tax free income.

Income tax free up to Rs 7 lakh

In the budget for the financial year 2023-24, it was announced that taxpayers adopting the new tax regime, whose annual income is up to Rs 7 lakh, will not have to pay tax. Experts believe that this step was taken to motivate the taxpayers of the salaried category to adopt the new tax regime.

No exemption on investment in new tax regime

No exemption is given on investment in the new tax regime. Now the government has made up its mind to give some more relief to these taxpayers through amendment in the Finance Bill. However, the government has not mentioned how much taxpayers with income above Rs 7 lakh will be eligible for this relief. Tax experts have told according to the calculation that individual taxpayers whose income will be up to Rs 7,27,777 can get the benefit of this provision.

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No tax up to Rs 7,00,000

Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7,00,000, he does not have to pay any tax, but if the income is Rs 7,00,100, then 25,010 Have to pay tax of Rs. Due to this additional income of Rs 100, the taxpayers have to pay tax of Rs 25,010. Therefore, a marginal relief has been proposed, so that the tax payable by the person should not exceed the increased income from the tax free income of Rs.7,00,000. In the above case, the income in excess of Rs.7,00,000 is Rs.100, so the same amount should be charged to tax.

Finance Bill amended to provide relief to taxpayers

Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, said the amendment in the Finance Bill has been made to provide some relief to individual taxpayers whose income is marginally higher than the tax free income. In the budget for the financial year 2023-24, it was announced that the taxpayers adopting the new tax regime, whose annual income is up to Rs 7,00,000, will not have to pay tax. Experts believe that this step was taken to motivate the salaried class taxpayers to adopt the new tax regime. No exemption is given on investment in the new tax regime.

Who will get relief

Now the government has made up its mind to give some more relief to these taxpayers through amendment in the Finance Bill. However, the government has not mentioned to what extent taxpayers having income above Rs 7,00,000 would be eligible for this relief. Tax experts have calculated that individual taxpayers whose income is up to Rs 7,27,777 can get the benefit of this provision.

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Answering a question on the new tax regime in the press conference held after the RBI board meeting, he said that more deductions have been made for the people in the new tax regime, which saves more money in their hands. The new tax regime lightens the tax burden on the people. Sitharaman said that the government had already asked to reduce the tax rate and make it easier.

The Finance Minister participated in the Customary Central Board of Directors meeting of RBI on Saturday after the Union Budget 2023-24. After this meeting, Sitharaman has said this in the press conference regarding the new tax regime. RBI Governor Shaktikanta Das was also present along with the Finance Minister in this meeting and the subsequent press conference.

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Senior citizens can file their Income Tax Returns under Old Tax Regime or New Tax Regime. Both the options will be available when they go to file ITR for assessment year 2023-24. There is no change in this regard. However, the new tax regime will appear as the default regime on the e-filing website. Senior citizens will also have the option of going for the old tax regime.

Which tax slab and rate will be applicable?

If you are filing ITR this year (for Assessment Year 2023-24 or Financial Year 2022-23), then the applicable tax slab and return filing rates will be the same as last year.

Tax slabs and rates for senior citizens-

New Tax Regime Slabs and Rates for ITR Filing in AY2023-24 (FY 2022-23) Rs
0 to
Rs 2.5 Lakh – Rs 0 to Rs 2.5 Lakh – 5% Above Rs 2.5 Lakh Rs
5 Lakh to Rs 7.5 Lakh – 12,500 Rs.5 lakh + 10% above
Rs.7.5 lakh to Rs.10 lakh – Rs.37,500 + 15% above Rs.7.5
lakh Rs.10 lakh to Rs.12.5 lakh – Rs.75,000 + 20% above Rs.10 lakh from
Rs.12.5 lakh 15 Above Rs.15 lakhs – Rs.1,25,000 + 25% above
Rs.12.5 lakhs Above Rs.15 lakhs – Rs.1,87,500 + 30% above Rs.15 lakhs

Old Tax Regime Slabs and Rates for ITR Filing in AY2023-24 (FY2022-23) Rs.3 Lakh-
0 Rs.3-5 Lakh-
5% Above Rs.3 Lakh Rs.5-10 Lakh- Above
Rs.10,000 + Rs.5 Lakh 20%
above Rs 10 lakh – Rs 1,10,000 + 30% above Rs 10 lakh

New Tax Regime Slabs and Rates for ITR Filing in AY2024-25 (FY 2023-24)- Rs
0-3 Lakh- 0
Rs 3-6 Lakh- 5%
Rs 6-9 Lakh- 10% Rs
9-12 Lakh- 15%
Rs 12-15 lakh – 20% Above
Rs 15 lakh – 30%

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If we talk about small income ie Rs 6 lakh per annum, then in the old tax regime, if you do not make any tax saving investment, then you will have to pay income tax of Rs 23,400 on this much income. But, if you adopt the new tax regime, then your Rs 6 lakh will be completely out of the tax net. That is, you will directly save tax of Rs 23,400.

If a person earns Rs 10 lakh annually, then under the new regime, he will have a total tax liability of Rs 54,600. On the other hand, if you choose the old tax slab, then you will have to pay tax of Rs 78,000 on this much income. In this way, you can save tax of Rs 23,400 under the new slab.

If you earn 50 lakh rupees annually, then you will reach the high bracket of 30 percent and according to the new tax regime, there will be a tax liability of Rs 12,32,400. For those adopting the old bracket, income tax of Rs 12.87 lakh will be made on earning Rs 50 lakh. That is, now you will be able to save Rs 54,600 in the new tax regime as compared to the old one.

If someone’s earning is Rs 1 crore annually, then his income will be included in the high tax bracket ie 30 per cent slab. Rs 30,71,640 will be taxed on this income if you adopt the new tax regime. At the same time, the total tax liability will come to Rs 31,31,700 on those who are associated with the old system. That is, in the new system, now you can save income tax of Rs 60,060 as compared to the old one.

How much liability is 2 crores If a person earns 2 crores annually, then the highest tax rate of 30 percent will be applicable on him. Surcharge will also be imposed on this. Thus the total tax liability will be Rs 67,99,260, if you opt for the new tax regime. On the other hand, those adopting the old tax regime will have to pay a total income tax of Rs 68,62,050. In this way you will directly save Rs 62,490.

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 The Finance Minister has tried his best to give a lot to the salaried middle class in this budget. When the Finance Minister started announcing the personal income tax in the budget, it took some time for people to understand it. But later she justified her statement that she understands the aspirations of the middle class.

The goal of making the new tax regime attractive is that under the new tax regime, those earning up to Rs 3 lakh will not need to file ITR. Earlier this limit was Rs 2.5 lakh. It has been increased by Rs 50,000 on behalf of the Finance Minister. This is the reason that now it will not be necessary to file ITR for those earning up to 3 lakhs. Actually the aim of the government is to make the new tax system more attractive. Earlier, those earning up to 2.5 lakh were exempted from ITR.

Proposal to make the new tax regime a default

Due to the promotion of the new tax regime, it has been proposed to make the new tax regime a default. Now whenever you start filing income tax return, you will automatically be under the purview of the new tax regime. If you want to file income tax under Old Tax Regime, then you have to select Old Tax Regime for this.

Along with the country, the eyes of the world were also focused on this budget. In the budget, along with pleasing the middle class, the Finance Minister has also taken care of the farmers. The biggest change has been made by Nirmala Sitharaman regarding income tax. For the first time, the government has made changes in the new tax regime. In this, instead of the earlier 7 tax slabs, they have been reduced to 4. Now you will not have to pay any tax on income up to 7 lakhs.

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Now it is clear that the focus of the government will be on the new regime of income tax. You should not be surprised if the government announces the closure of the old regime in the next few years. Apart from increasing the exemption limit, the Finance Minister has reduced the number of slabs. Income tax rates have been reduced. Not only this, he has also announced standard deduction for the people working in the new regime.

The Finance Minister has said that salaried people whose annual income is Rs 15.5 lakh or more will get a standard deduction of Rs 52,500 annually under the new tax regime. Earlier, no standard deduction was available in the new tax regime. Only people employed in the old tax regime get the benefit of standard deduction. It is Rs 50,000 per annum.

The standard deduction was introduced by the government in the Union Budget 2018. However, the transport allowance and medical reimbursement were withdrawn by the government instead. Till the financial year 2017-18, a taxpayer could claim Rs 19,200 as transport allowance.

He could also claim medical reimbursement of Rs 15,000 annually. For this, the working people had to submit the medical bill to the finance department of the company. Earlier the standard deduction was only Rs 40,000. Then in the interim budget 2019, it was increased to Rs 50,000. The concept of standard deduction is not new. The government used to give this deduction to the salaried class in the financial year 2004-05. Then it was scrapped.

On February 1, Finance Minister Nirmala Sitharaman has announced to give the benefit of standard deduction in the new income tax regime. Its purpose is to attract taxpayers towards the new tax regime. The government wants more and more taxpayers to use the new tax system instead of the old tax system. That is why the Finance Minister has said that now the new tax regime will be the default tax regime.

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People are hopeful that many tax relief announcements can be made by the government in this budget and tax slabs can be changed. On February 1, 2023, the budget speech will be given in Parliament by Finance Minister Nirmala Sitharaman.

Budget 2023 In such a situation, we are going to give you information about the tax slab before the budget. At present, tax is collected according to two tax slabs. In this, the name of one is Old Tax Regime and the name of the other is New Tax Regime. Today we are going to update you about the amount on which 5% tax is levied in both the tax slabs.

Income Tax First talk about Old Tax Regime, then if your age is less than 60 years, then according to the financial year 2022-23, you will have to pay 5% tax on income between Rs 2.5 lakh to Rs 5 lakh per annum. On the other hand, if your age is between 60 to 80 years, then you will have to pay 5% tax on income from Rs 3 lakh per annum to Rs 5 lakh per annum.

Income Tax Slab Apart from this, if tax is to be filed according to the New Tax Regime according to the financial year 2022-23, then people of all ages will have to pay 5% tax on income between Rs 2.5 lakh to Rs 5 lakh per annum.

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According to these tax slabs, people have to pay tax on their income. On the other hand, after a few weeks, the budget is also going to be presented by the central government. Every year taxpayers expect that the government should give concession regarding income tax in the budget. However, now before the budget, it is very important for the tax payers to know one important thing. The Union Budget is presented through the Finance Minister.

Tax Actually, for the financial year 2021-22, tax is being collected by the government according to two slabs. There is a New Tax Regime and the other is the Old Tax Regime. The rate of tax charged on income in both the slabs is different. In such a situation, 20 percent income tax is also collected by the government on different incomes. Here we are going to tell you that on how much income 20% tax is charged in New Tax Regime and on how much tax is charged in Old Tax Regime.

20 percent tax 

Tell that if income tax is to be filed according to the New Tax Regime, then if there is an income of Rs 10 lakh to Rs 12.5 lakh annually, then 20 percent tax has to be paid on it. However, if income tax is to be filed according to the Old Tax Regime, then 20% tax will have to be paid on income from Rs 5 lakh per annum to Rs 10 lakh per annum.

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This will be the last full budget of the government before the 2024 Lok Sabha elections. That’s why the government’s effort is also to please everyone from the salaried class to the farmers. On the other hand, every section is pinning a lot of hopes on the Modi government. In the last few years, the Modi government has made many changes regarding the budget. A change in that was made by the government keeping in mind the tax payers. But even today the situation regarding it is not clear among many people.

The claim of tax exemption in 7-10 ways in the old tax regime

was a change in the alternative income tax system introduced by the government in the General Budget 2020-21. The system of new tax regime and old tax regime was started in 2020-21 by Finance Minister Nirmala Sitharaman. Tax pair has to select any one of these two. Meanwhile, Finance Minister Nirmala Sitharaman said on Friday that people of low income group can claim tax exemption in 7-10 ways in the old tax regime.

Government brought another tax system

in 2020 Actually, the ‘New Tax Regime’ introduced in 2020 is different from the traditional tax system (Old Tax regime) that has been running since independence. In the old tax regime, you can claim various types of deductions including 80C, 80D, HRA. But you cannot claim any kind of deduction in the new tax slab. Finance Minister Nirmala Sitharaman also said that in 2020, the government brought another system with the old tax regime. There is no exemption in this, but it is simple and the tax is less. The Finance Minister said that I had to make seven slabs so that there are low rates for the people of low income group.

Income up to Rs 2.5 lakh tax free

In the new tax regime, income up to Rs 2.5 lakh is tax free. After this, 5 percent on income from 2.5 lakh to 5 lakh rupees, 10 percent on income from 5 lakh to 7.5 lakh rupees, 15 percent on income from 7.5 lakh to 10 lakh rupees, on income from 10 lakh to 12.5 lakh rupees. 20 per cent, 25 per cent on income between Rs 12.5 lakh to Rs 15 lakh and 30 per cent on income above Rs 15 lakh.

It is also important to understand this tax system.

Similarly, under the old tax system, income up to Rs 2.5 lakh is tax free. After this, 5 percent tax is levied on income between Rs 2.5 lakh and Rs 5 lakh. Income between Rs 5 lakh and Rs 10 lakh is taxed at 20 per cent and income above Rs 10 lakh and above is taxed at 30 per cent. Sitharaman said that the benefits of the old tax regime have not been removed, rather the new exemption-free tax regime is an alternative form of the income tax return system.

Old Tax Regime

Income up to 2.5 Lakh—-0% Tax
Income up to Rs 2,50,001 to 5 Lakh—-5% Tax Income
up to Rs 5,00,001 to 7.5 Lakh—-20% Tax
7 Income
from Rs.10,00,001 to Rs.10 lakhs —-20%
tax
30% tax on income above Rs.

New Tax Regime

Income up to 2.5 lakhs—-0% tax
Income from 2,50,001 to 5 lakhs—-5% tax
Income from 5,00,001 to 7.5 lakhs—-10% tax
7 Income
from Rs.10,00,001 to Rs.10
lakh—–15%
tax 30% tax on income above Rs.

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Talking about the New Tax Regime, the tax rate in this is the same for people of all ages.  Income Tax in India is collected through the Income Tax Department. Those whose income is more than a certain limit, they have to pay income tax every year. Two tax regimes have been fixed by the government in the country.

They also have different advantages. At the same time, the Union Budget (Budget 2023) is also to be presented by the Central Government in the coming few weeks. This time in the budget, people have expectations of a big announcement on income tax as well. However, even before the budget, it is very important for some people to know one important thing.

Tax Slab Different slabs of income tax have been fixed in the country. In these, different tax rates are fixed on income in New Tax Regime, whereas in Old Tax Regime, different tax rates are fixed on income. Talking about the New Tax Regime, the tax rate in this is the same for people of all ages. Although there is a slight change in the tax rates according to the age in the Old Tax Regime.

New Tax Regime In New Tax Regime, Hindu Undivided Family, persons up to 60 years of age, senior citizens between 60 years to 80 years of age and very senior citizens above 80 years of age will have to pay tax at the same rate. Any increase in the basic exemption limit in the new tax regime will not benefit senior and very senior citizens. On the other hand, in the New Tax Regime, tax is waived up to Rs 2.5 lakh annually.

Old Tax Regime

However, tax exemption can be availed according to age in Old Tax Regime. For the financial year 2020-21, if a person below 60 years of age pays tax according to the Old Tax Regime, then his annual tax up to Rs 2.5 lakh is waived. After this, 5% tax is levied on 2.5 to 5 lakh rupees annually.

Their tax up to three lakh rupees is waived , while according to the Old Tax Regime for the financial year 2020-21, senior citizens, whose age is more than 60 years but less than 80 years, they will have to pay three lakh rupees annually in income tax.

Discount up to. This means that if a person, whose age is between 60 years to 80 years and he files income tax according to Old Tax Regime, then he will not have to pay any tax on income up to Rs 3 lakh annually. Their tax is waived on income up to three lakh rupees annually. At the same time, after this, they will have to pay 5% tax on income ranging from Rs 3 lakh to Rs 5 lakh annually.

Their tax up to five lakh rupees is waived , while super senior citizens whose age is more than 80 years, if they file tax according to Old Tax Regime, then they do not have to file tax on income up to five lakh rupees annually. Will happen. However, they will have to pay tax at the rate of 20 per cent on income between Rs 5 lakh and Rs 10 lakh.

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Along with this, middle class people are also expected to get tax exemption in this budget. However, before the budget, we are going to tell you under which slab at present income tax is paid.

Income Tax At present, income tax is paid in India under two tax systems. The name of one is Old Tax Regime and the name of the other is New Tax Regime. In both these systems, tax is collected according to different slabs. If we talk about the financial year 2022-23, then in this financial year, 5% to 30% tax is collected on different incomes. At the same time, there is an important thing about 10 percent tax which people should know.

Income Tax Slab Actually, if a person files tax according to New Tax Regime and his income is between Rs 5 lakh to Rs 7.5 lakh annually, then he will have to pay 10% tax but this is not the case in Old Tax Regime. Actually, there is no provision of 10% tax in the old tax regime.

If a person files tax according to Old Tax Regime, then there is no 10 percent tax slab in it. In the financial year 2022-23, if an individual whose age is less than 60 years files tax, then he will have to pay 5% tax on annual income between Rs 2.5 lakh to Rs 5 lakh. At the same time, he will have to pay 20% tax on income between Rs 5 lakh and Rs 10 lakh annually.

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In such a situation, people are hopeful that some relief step will be taken by the government regarding income tax. Whereas today we are going to tell you the important update related to income tax before the budget. People who do not file income tax should also be aware of this. Let’s know…

Income Tax Slab At present, income tax is collected in the country according to the two tax system. One of these is Old Tax Regime and the other is New Tax Regime. If a person files tax according to the Old Tax Regime, then he can also get many types of exemptions. On the other hand, if someone files tax according to the New Tax Regime, then he cannot get other exemptions. Whereas today we are going to update you about the slabs present in Old Tax Regime.

Income Tax Actually, there are four tax slabs in the Old Tax Regime, according to which tax is filed. According to the financial year 2022-2023, if an individual taxpayer below the age of 60 years in the country files tax according to the Old Tax Regime, then he does not have to pay any tax on an annual income of Rs 2.5 lakh. After this, 5% tax is charged from income of Rs 2.5 lakh per annum till income of Rs 5 lakh per annum.

Tax Slab According to Old Tax Regime, if someone’s income is more than Rs 5 lakh per annum and up to Rs 10 lakh per annum, then he will have to pay 20% income tax. On the other hand, if someone’s income is more than Rs 10 lakh annually, then he has to pay income tax of 30 percent.

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At this time, everyone’s eyes are on any news related to the budget or the demand made by different sectors to the Finance Minister. From job professionals to farmers, everyone’s eyes are on the budget. Due to the last full budget of the government before the Lok Sabha elections, the general public has a lot of expectations from it.

Less tax for low income earners In this budget, along with increasing the income tax exemption limit, the standard deduction limit is also expected to be increased. At present, there are two regimes of income tax exemption. First new tax regime and second old tax regime. Finance Minister Nirmala Sitharaman recently said during a program that the optional income tax system with seven tax slabs was brought in so that low income earners have to pay minimum tax.

No exemption in the new tax regime

Sitharaman told that in the old tax regime, you can claim income tax exemption in different ways. In this, tax payers can claim exemption in 7-10 ways. In this, tax has to be paid at the rate of 10, 20 and 30 percent. Along with the old tax regime, the government has brought a new tax regime, there is no exemption from tax in this. But the tax rate is less in this.

4 slabs in Old Tax Regime The Finance Minister said that there are 7 tax slabs in the New Old Regime, while there are 4 slabs in the Old Tax Regime. Old tax regime is better for low income group people. In this, you can save tax in 7 ways including house rent allowance, home loan interest, 80C and medical insurance. The Finance Minister also said that he had to make seven slabs so that there would be lower rates for the low income group people. Let us know the rates of old tax regime-

Old Tax Regime-

Rs 0 – Rs 2,50,000 – Zero Tax Rs
2.5 Lakh to Rs 5 Lakh – 5 Percent Tax Rs 5 Lakh
to Rs 10 Lakh – 20 Percent Tax
Rs 10 Lakh to Rs 15 Lakh or above – 30 Percent Tax

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New tax regime may be applicable

According to the information received from the sources, the government wants to have a uniform tax system across the country, due to which it is believed that the New Income Tax Regime will be implemented this time. can be announced.

Tax rates may be cut In the budget 2020-21, Finance Minister Nirmala Sitharaman had announced a new tax regime, in which tax rates were reduced without exemptions and deductions. Let us tell you that in the assessment year 2021-22, about 5.8 crore people had filed taxes, but less than 5 percent of these people had adopted the new tax system. For this reason, the government can also announce a reduction in tax rates in this budget.

There should be only one tax system in the country. In order to make the income tax system popular, the Ministry of Finance is considering to cut its rates. Experts believe that there should be only one tax system in the country, in which taxpayers get exemption and it should be very simple.

Exemption is available in the old tax system Taxpayers get many types of exemptions in the old tax system. In this, exemption is available including House Rent Allowance (HRA), Leave Travel Allowance (LTA) and many sections of the Income Tax Act, 1961. At the same time, many exemptions are available under section 80C including insurance, ELSS, provident fund, PPF.

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Talking about the New Tax Regime, the tax rate in this is the same for people of all ages.  Income Tax in India is collected through the Income Tax Department. Those whose income is more than a certain limit, they have to pay income tax every year. Two tax regimes have been fixed by the government in the country.

They also have different advantages. At the same time, the Union Budget (Budget 2023) is also to be presented by the Central Government in the coming few weeks. This time in the budget, people have expectations of a big announcement on income tax as well. However, even before the budget, it is very important for some people to know one important thing.

Tax Slab Different slabs of income tax have been fixed in the country. In these, different tax rates are fixed on income in New Tax Regime, whereas in Old Tax Regime, different tax rates are fixed on income. Talking about the New Tax Regime, the tax rate in this is the same for people of all ages. Although there is a slight change in the tax rates according to the age in the Old Tax Regime.

New Tax Regime In New Tax Regime, Hindu Undivided Family, persons up to 60 years of age, senior citizens between 60 years to 80 years of age and very senior citizens above 80 years of age will have to pay tax at the same rate. Any increase in the basic exemption limit in the new tax regime will not benefit senior and very senior citizens. On the other hand, in the New Tax Regime, tax is waived up to Rs 2.5 lakh annually.

Old Tax Regime

However, tax exemption can be availed according to age in Old Tax Regime. For the financial year 2020-21, if a person below 60 years of age pays tax according to the Old Tax Regime, then his annual tax up to Rs 2.5 lakh is waived. After this, 5% tax is levied on 2.5 to 5 lakh rupees annually.

Their tax up to three lakh rupees is waived , while according to the Old Tax Regime for the financial year 2020-21, senior citizens, whose age is more than 60 years but less than 80 years, they will have to pay three lakh rupees annually in income tax.

Discount up to. This means that if a person, whose age is between 60 years to 80 years and he files income tax according to Old Tax Regime, then he will not have to pay any tax on income up to Rs 3 lakh annually. Their tax is waived on income up to three lakh rupees annually. At the same time, after this, they will have to pay 5% tax on income ranging from Rs 3 lakh to Rs 5 lakh annually.

Their tax up to five lakh rupees is waived , while super senior citizens whose age is more than 80 years, if they file tax according to Old Tax Regime, then they do not have to file tax on income up to five lakh rupees annually. Will happen. However, they will have to pay tax at the rate of 20 per cent on income between Rs 5 lakh and Rs 10 lakh.

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In the case of individuals, if someone’s income exceeds the minimum limit, then tax is levied according to the slab system. Indian Income Tax taxes individual taxpayers on the basis of a slab system. The slab system means that different tax rates are prescribed for different categories of income. This means that with the increase in the income of the taxpayer, the tax rates of the tax go on increasing.

Tax Regime

This type of taxation enables a progressive and fair tax system in the country. Such income tax slabs undergo changes during every budget. These slab rates are different for different categories of taxpayers. At the same time, there are currently two tax regimes in the country, according to which tax is collected. These are known as New Tax Regime and Old Tax Regime.

The Union Budget is going to be presented by the Finance Minister in a few days. On the other hand, if we look at the New Tax Regime and the Old Tax Regime for FY 2021-22, then a lot of difference will be seen. In these tax slabs, tax is charged at different rates for income up to Rs 10 lakh.

5 percent difference

In the New Tax Regime for FY 2021-22, tax has to be paid at the rate of 15 percent on annual income of Rs. 7.5 lakh to Rs. 10 lakh. Whereas it is not so in Old Tax Regime. In the Old Tax Regime, individual taxpayers below 60 years of age will have to pay 20 per cent tax on annual income between Rs 5 lakh and Rs 10 lakh. In such a situation, there is a difference of 5% in both the tax regimes for FY 2021-22 on an annual income of up to Rs 10 lakh.

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Talking about the New Tax Regime, the tax rate in this is the same for people of all ages.  Income Tax in India is collected through the Income Tax Department. Those whose income is more than a certain limit, they have to pay income tax every year. Two tax regimes have been fixed by the government in the country.

They also have different advantages. At the same time, the Union Budget (Budget 2023) is also to be presented by the Central Government in the coming few weeks. This time in the budget, people have expectations of a big announcement on income tax as well. However, even before the budget, it is very important for some people to know one important thing.

Tax Slab Different slabs of income tax have been fixed in the country. In these, different tax rates are fixed on income in New Tax Regime, whereas in Old Tax Regime, different tax rates are fixed on income. Talking about the New Tax Regime, the tax rate in this is the same for people of all ages. Although there is a slight change in the tax rates according to the age in the Old Tax Regime.

New Tax Regime In New Tax Regime, Hindu Undivided Family, persons up to 60 years of age, senior citizens between 60 years to 80 years of age and very senior citizens above 80 years of age will have to pay tax at the same rate. Any increase in the basic exemption limit in the new tax regime will not benefit senior and very senior citizens. On the other hand, in the New Tax Regime, tax is waived up to Rs 2.5 lakh annually.

Old Tax Regime

However, tax exemption can be availed according to age in Old Tax Regime. For the financial year 2020-21, if a person below 60 years of age pays tax according to the Old Tax Regime, then his annual tax up to Rs 2.5 lakh is waived. After this, 5% tax is levied on 2.5 to 5 lakh rupees annually.

Their tax up to three lakh rupees is waived , while according to the Old Tax Regime for the financial year 2020-21, senior citizens, whose age is more than 60 years but less than 80 years, they will have to pay three lakh rupees annually in income tax.

Discount up to. This means that if a person, whose age is between 60 years to 80 years and he files income tax according to Old Tax Regime, then he will not have to pay any tax on income up to Rs 3 lakh annually. Their tax is waived on income up to three lakh rupees annually. At the same time, after this, they will have to pay 5% tax on income ranging from Rs 3 lakh to Rs 5 lakh annually.

Their tax up to five lakh rupees is waived , while super senior citizens whose age is more than 80 years, if they file tax according to Old Tax Regime, then they do not have to file tax on income up to five lakh rupees annually. Will happen. However, they will have to pay tax at the rate of 20 per cent on income between Rs 5 lakh and Rs 10 lakh.

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Income tax slabs are different for different income groups. At the same time, people can pay income tax according to two slabs. In these one Old Tax Regime is included and there is also another New Tax Regime.

Tax Regime

The Finance Minister had introduced the new tax regime in the Union Budget 2020, wherein there is an option for individuals and HUFs (Hindu Undivided Families) to pay tax at lower rates without claiming deductions under various sections. Tax rates are different in Old Tax Regime and New Tax Regime. However, if the age of a taxpayer is less than 60 years, then he does not have to pay any tax on Rs 2.5 lakh annually.

Income Tax After this, taxpayers below the age of 60 years have to pay 5% tax on annual income between Rs 2.5 lakh and Rs 5 lakh. However, these people also get a tax rebate of 5 percent. But some people have been given tax exemption by the government even on higher annual income.

They are given tax exemption up to an income of 5 lakhs. In fact, the New Tax Regime rates have not been differentiated on the basis of age. However, under the Old Tax Regime, no tax is levied on an annual income of Rs 3 lakh for senior citizens, whose age is between 60 and 80 years. On the other hand, for Super Senior Citizens, whose age is more than 80 years, no tax has to be paid on annual income of Rs 5 lakh.

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In the new tax regime, the tax rates were reduced by eliminating the option of income tax exemption, but its benefit did not show and till now the number of taxpayers adopting the new regime is negligible. Keeping this in mind, the government is considering ending this system.

New Delhi. In the general budget to be presented on February 1 next year, the government can make a big announcement regarding personal income tax. A high official related to the matter says that in the budget of the financial year 2023-24, an announcement can be made to abolish the new tax regime. Under this, taxpayers get the option of lower tax rate, but the benefit of tax-exempt investment options ends.

According to media report , an official related to the matter said that the government had implemented the new tax regime in the financial year 2020-21. In this, taxpayers get the option of low rate tax slab. However, taxpayers who adopt this regime stop getting the benefit of tax exemption on any investment. Now that three years have passed since the introduction of the new tax regime, most of the taxpayers have adopted the old tax slab.

finance ministry now budget and is also reviewing the rules related to income tax. The official says that the purpose of the government regarding tax is to reduce the burden on the taxpayers. We introduced the new tax regime so that taxpayers with low tax brackets do not get burdened.

Why the new tax regime failed

Under the new tax regime, taxpayers have to pay tax on income above Rs 2.5 lakh. At the same time, income up to Rs 5 lakh in the old tax regime remains tax free. This is the biggest reason why taxpayers insist on adopting the old tax regime. About 75 percent of the taxpayers who file income tax returns every year fall in the income bracket of less than 5 lakhs and they get tax exemption up to Rs 5 lakhs. On the other hand, even though the rate of tax is lower in the new tax regime, there is no exemption in it at all. Only 1% of taxpayers who filed returns this year on the income tax web portal Clear had adopted the new tax regime.

Government should make something special

The high official said that the government will have to make some special plans regarding the tax exemption limit along with reducing the slab. People will also benefit from this and if more taxpayers file returns, then the tax collection in the government treasury will also increase. Actually, in the old tax regime from 2.5 to 5 lakhs, the tax rate is 5 percent, but as soon as your income goes above 5 lakhs, the tax rate increases to 20 percent, which remains the same till 10 lakhs. It does not seem logical in any way to suddenly increase the tax rate from 5 per cent to 20 per cent.

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