As per the new policy of the state government, now the Motor Vehicle Tax will be based on the ex-showroom price of the vehicle and not just on its category or fuel type.

New tax slab on petrol vehicles:

Tax on vehicles up to ₹10 lakh – 11%
Tax on vehicles between ₹10-20 lakh – 12% Tax
on vehicles above ₹20 lakh – 13% Tax

Rates for diesel vehicles will be slightly higher:

Up to ₹10 lakh – 13%
₹10-20 lakh – 14%
Above ₹20 lakh – 15%

Direct 20% tax on imported vehicles

If a vehicle is imported from abroad or is registered in the name of a company/corporate, then a direct 20% one-time tax will be levied on it. This decision will have a significant impact on the luxury segment.

CNG and LNG vehicles did not get any relief.

While earlier CNG and LNG vehicles used to get tax concessions, now an additional 1% tax will be imposed on them. This has come as a shock to consumers who buy vehicles running on green fuel. The government says that this step is necessary to increase revenue and bring balance in the tax structure.

New tax rules for commercial vehicles too:

Till now, tax was levied on the basis of loading capacity, but now the price of the vehicle will be the basis. For example, if a pickup truck is worth ₹ 10 lakh, then now it will have to pay 7% tax i.e. ₹ 70,000 – whereas earlier it was only around ₹ 20,000.

Relief to electric vehicles

While there has been a huge change in tax, EVs (electric vehicles) have got some relief. The government had proposed a 6% tax on EVs costing more than ₹ 30 lakh, but it has been postponed for now. This may provide some relief to those buying eco-friendly vehicles. The state government says that this new tax system will curb tax evasion, and it will be possible to collect tax according to the actual price of the vehicles. Along with this, an attempt has been made to make the tax collection system simple and transparent.

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Finance Minister Nirmala Sitharaman made such an announcement in the budget speech that the salaried people have hit the jackpot. She has not only increased the relief of zero income tax to Rs 4 lakh, but has also changed all the income tax slabs.

The Finance Minister has made income up to Rs 12 lakh tax free without worrying about the loss of Rs 1 lakh crore in the government treasury. All these changes have been made in the new tax regime, the old regime has not been touched in any way. Till now, in the new regime, there was zero tax on income up to Rs 3 lakh, now it has been directly increased to Rs 4 lakh.

What will be the new tax slab?

• Zero tax on income up to Rs 4 lakh
• 5 per cent tax on income from Rs 4 to 8 lakh
• 10 per cent tax on income from Rs 8 to 12 lakh
• Only 15 per cent tax on income from Rs 12 to 16 lakh
• 20 per cent tax will be levied on income from Rs 16 to 20 lakh.
• 25 per cent tax will be levied on income from Rs 20 to 24 lakh.
• 30 per cent tax will be levied only on income above Rs 24 lakh.

Who will save how much money?

• Those earning up to Rs 12 lakh will directly benefit by Rs 80 thousand.
• Those earning between Rs 12 to 18 lakh will benefit by Rs 70 thousand, which is a 33 percent profit.
• Those earning up to Rs 25 lakh will benefit by Rs 1.10 lakh, which is a 25 percent profit under the old regime.

The Finance Minister has not only exempted income up to Rs 12 lakh from income tax, but has also maintained the standard deduction of Rs 75,000. In this way, the total tax exemption will be Rs 12.75 lakh. That is, those earning up to Rs 12 lakh 75 thousand will not be charged any tax. You will have to pay tax only on earning more than this and the slab has been reduced in that too .

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The post Income Tax Slab Change : Entire tax slab has changed in the new regime – check new tax slab first appeared on Rightsofemployees.com.

Whether the limit of standard deduction is increased or the limit of 80C is increased. Here we are telling you that in the last budget 2024-25, the government had made many big announcements related to income tax, which is important for all taxpayers to know.

1. Announcement of new tax slab

In the last budget, the government changed the tax slabs in the new tax system to provide relief to taxpayers. The new tax slabs were as follows:

• Rs 0-3 lakh: 0% tax
• Rs 3-7 lakh: 5%
• Rs 7-10 lakh: 10%
• Rs 10-12 lakh: 15%
• Rs 12-15 lakh: 20%
• Rs 15 lakh and above: 30%

Due to these new slabs, taxpayers can save up to Rs 17,500 annually.

2. Increase in standard deduction

The limit of standard deduction has been increased from Rs 50,000 to Rs 75,000.

The deduction limit for family pensioners has been increased from Rs 15,000 to Rs 25,000. This will provide huge tax relief to salaried and retired employees.

3. Deduction in NPS

The deduction limit on employer’s contribution to the National Pension System (NPS) has been increased from 10% to 14%. This move will promote savings in retirement funds.

4. Changes in capital gains tax

Short Term Capital Gains Tax (STCG) rate increased from 15% to 20%.

The rate of Long Term Capital Gains Tax (LTCG) was increased from 10% to 12.5%.

LTCG exemption limit on equity investments increased from Rs 1 lakh to Rs 1.25 lakh.

The purpose of this change is to encourage investors to invest for a long time.

5. TCS on luxury goods

Tax Collection at Source (TCS) was implemented on luxury goods worth more than Rs 10 lakh. This rule came into effect from January 1, 2025. Its purpose is to keep an eye on expensive transactions and prevent tax evasion. Through these changes, the government has tried to give relief to taxpayers as well as strengthen tax collection.

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The post Taxpayers Update: 5 major rules related to income tax have been changed – Key Details Inside first appeared on Rightsofemployees.com.

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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The new tax slabs have failed to woo individual taxpayers even after two years. As on July 31, 2022, 5.83 crore individual taxpayers have filed income tax returns for assessment year 2022-23. Of these, the number of people who opted for the new tax slab was negligible. To attract income tax payers towards the new slab, the government may change the tax rates in the budget 

• Tax exemption can be available on income up to Rs 5 lakh in the new slab. Now it is taxed at 5 per cent. The maximum slab of 30 per cent can be reduced to 25 per cent.
• Home loan interest can be exempted. Standard deduction can also be included in this.

Tax- free income may increase

At present, the minimum limit of tax exemption is Rs 2.5 lakh. There has been no change in this after 2014-15. At that time this limit was increased from Rs 2 lakh to Rs 2.5 lakh. In view of the increased need for savings after inflation and the Corona epidemic, the government can increase the basic limit to five lakh rupees. This will increase the spending capacity and the economy will benefit.

80C: There has been no announcement for years regarding the exemption available under Section 80C of the Income Tax Act, the limit of 2.5 lakhs. Due to the good current financial year on the tax collection front, the government may increase the exemption limit under 80C from Rs 1.50 lakh to Rs 2.50 lakh. The Institute of Chartered Accountants of India says that increasing the scope of 80C will give people a chance to save.

• The standard deduction limit may also be increased from Rs 50,000 to Rs 75,000.

PPF: Need to make separate provision from 80C
The annual limit for contribution to Public Provident Fund (PPF) may be raised to Rs 3 lakh from the existing Rs 1.50 lakh. This has not changed for many years. Experts say that many schemes of life insurance, children’s tuition fees, mutual funds already come under the purview of 80C. Hence, there is no scope for adequate contribution to PPF. Separate provision may be made for this.

Insurance:

The scope of 80D increased to reduce the burden Financial burden on the middle class has increased with the increased cost of health insurance after Corona. To reduce this burden, the scope of 80D can be extended to cover expenses like doctor fees and tests.

• Subhrajit Mukhopadhyay, executive director, Edelweiss Tokio Life Insurance, said that investment up to Rs 1.50 lakh is eligible for tax exemption under 80C. In such a situation, a separate provision for tax exemption can be made on the premium paid for life insurance.
• The GST rate on health insurance can be reduced from 18 per cent to 5 per cent.

Affordable housing: Need to amend the rule

Experts say that there is a need to reduce the interest rates on home loans to make home loans affordable. Although the loan rates depend on the policy rates of RBI, but the budget can give relief to home buyers by relaxing the rules for taking home loans. In this, the minimum limit of downpayment can be reduced. 

• Deduction on home loan interest under 80EEA for home buyers may be increased from the existing limit of Rs 1.50 lakh to Rs 2 lakh.
• The price band for properties under affordable housing may be raised from Rs 45 lakh to Rs 75 lakh. 

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At the very beginning of the pre-budget meetings, the demand for revising it has started rising. The central government is considering increasing the tax-free slab to Rs 5 lakh in the two-year-old alternative personal income tax regime. According to a government official, at present the taxpayer does not have to pay any tax if his annual taxable income is Rs 2.50 lakh. By increasing the scope of tax-free slabs, the tax burden on the taxpayers will be reduced and they will be left with more money to spend or make suitable investments.

He said that very few taxpayers have opted for the alternative tax regime. If taxpayers take advantage of tax exemptions like Section 80C, Section 80D, then the tax liability in the old personal income tax system comes down. But there is no benefit of any kind of deduction in the new system. This step is being taken because very few people have adopted the new tax system.

Tax related agenda will start from next week

According to sources, this issue has been raised during the preparations for the upcoming budget and the concerned departments have been asked to suggest ways to improve the system. The official says that as part of the budget-making exercise, the tax-related agenda will start from next week, where we will look into the possibility of such changes in the taxation system. However, he said that whilea considering any such proposal, it must be seen that how much this change will affect the total revenue received by the government and whether we have the scope to do so or not.

He said that a preliminary estimate of the impact on revenue due to the increase in the tax-free range under the new system has been done and it can be sent to the budget makers for consideration. He said that it can also be discussed that there is no need to change both the old and new systems of personal income tax.

Understand the new tax slab like this

If we look at the new tax slab, the tax rate has been kept low in it. The new tax slab is different from the old slab in many ways. There are more slabs with lower rates. Apart from this, the benefits of many exemptions and deductions have been reduced as compared to the old tax slab. In this system, as the income increases, the tax slab increases and in this sequence the tax liability also increases.

• Zero tax on earning up to 2.5 lakhs,
• 5% on 2.5-5 lakhs (exemption under 87A),
• 10% on 5-7.5 lakhs,
• 15% on 7.5-10 lakhs,
• 20% on 10-12.5 lakhs,
• 25% on 12.5-15 lakhs,
• 30% tax has to be paid on income above 15 lakhs.

Old tax slab

In the old tax slab, no tax has to be deposited on income up to 5 lakhs. Apart from this, under section 80C, there is exemption from depositing tax on investment of Rs 1.5 lakh. Accordingly, taxpayers do not have to pay tax on income up to about 6.5 lakhs. Income tax rate in old tax regime or old tax slab mainly depends on your income and income slab. Age is also taken into account in this.

• Up to 2.5 Lakh – 0%
• 2.5 lakh to 5 lakh – 5%
• 5 lakh to 10 lakh – 20%
• Above 10 Lakh – 30%

Need for consultation with stakeholders

The new system of alternate personal income tax slabs with a lower rate of tax was introduced as an option in the Union Budget 2020-21. However, estimates suggest that only 10 to 12 per cent taxpayers have opted for it due to higher tax liability as compared to the old system. There is also discussion on reforms in direct taxes including restructuring of capital gains tax. With regard to capital gains, the official indicated that it would be a separate exercise and could be done outside the budget, as it required extensive consultations with all stakeholders.

The post Tax Free Slab: Now those earning up to 5 lakhs will not have to pay tax, the government is preparing, know the planning first appeared on Rightsofemployees.com.

At the very beginning of the pre-budget meetings, the demand for revising it has started rising. The central government is considering increasing the tax-free slab to Rs 5 lakh in the two-year-old alternative personal income tax regime. According to a government official, at present the taxpayer does not have to pay any tax if his annual taxable income is Rs 2.50 lakh. By increasing the scope of tax-free slabs, the tax burden on the taxpayers will be reduced and they will be left with more money to spend or make suitable investments.

He said that very few taxpayers have opted for the alternative tax regime. If taxpayers take advantage of tax exemptions like Section 80C, Section 80D, then the tax liability in the old personal income tax system comes down. But there is no benefit of any kind of deduction in the new system. This step is being taken because very few people have adopted the new tax system.

Tax related agenda will start from next week

According to sources, this issue has been raised during the preparations for the upcoming budget and the concerned departments have been asked to suggest ways to improve the system. The official says that as part of the budget-making exercise, the tax-related agenda will start from next week, where we will look into the possibility of such changes in the taxation system. However, he said that while considering any such proposal, it must be seen that how much this change will affect the total revenue received by the government and whether we have the scope to do so or not.

He said that a preliminary estimate of the impact on revenue due to the increase in the tax-free range under the new system has been done and it can be sent to the budget makers for consideration. He said that it can also be discussed that there is no need to change both the old and new systems of personal income tax.

Understand the new tax slab like this

If we look at the new tax slab, the tax rate has been kept low in it. The new tax slab is different from the old slab in many ways. There are more slabs with lower rates. Apart from this, the benefits of many exemptions and deductions have been reduced as compared to the old tax slab. In this system, as the income increases, the tax slab increases and in this sequence the tax liability also increases.

• Zero tax on earning up to 2.5 lakhs,
• 5% on 2.5-5 lakhs (exemption under 87A),
• 10% on 5-7.5 lakhs,
• 15% on 7.5-10 lakhs,
• 20% on 10-12.5 lakhs,
• 25% on 12.5-15 lakhs,
• 30% tax has to be paid on income above 15 lakhs.

Old tax slab

In the old tax slab, no tax has to be deposited on income up to 5 lakhs. Apart from this, under section 80C, there is exemption from depositing tax on investment of Rs 1.5 lakh. Accordingly, taxpayers do not have to pay tax on income up to about 6.5 lakhs. Income tax rate in old tax regime or old tax slab mainly depends on your income and income slab. Age is also taken into account in this.

• Up to 2.5 Lakh – 0%
• 2.5 lakh to 5 lakh – 5%
• 5 lakh to 10 lakh – 20%
• Above 10 Lakh – 30%

Need for consultation with stakeholders

The new system of alternate personal income tax slabs with a lower rate of tax was introduced as an option in the Union Budget 2020-21. However, estimates suggest that only 10 to 12 per cent taxpayers have opted for it due to higher tax liability as compared to the old system. There is also discussion on reforms in direct taxes including restructuring of capital gains tax. With regard to capital gains, the official indicated that it would be a separate exercise and could be done outside the budget, as it required extensive consultations with all stakeholders.

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