The government has raised the income tax break limit for those who choose the New Tax Regime to Rs 7 lakh per year...
Digital Desk: Union Finance Minister Nirmala Sitharaman announced today a rise in tax relief, which is currently considered a significant "tax relief" for the country's middle-class people.
The government has raised the income tax exemption ceiling for people who choose the New Tax Regime from Rs 5 lakh to Rs 7 lakh per year.
This new tax system also comprises a five-tiered structure with no tax for individuals earning less than Rs 3 lakh and tax rates of 5%, 10%, 15%, 20%, and 30% for those earning more.
The minister also announced a Rs 52,500 Standard Deduction for salaried workers earning Rs 15.5 lakh or more.
To further incentivize the new tax system, the minister also declared that the old regime, which has higher tax rates but various exemptions, will be available exclusively on request for the time being.
Finally, she advocated raising the tax exemption ceiling on leave encashment for non-government-paid employees' retirement to Rs 25 lakh.
The Old Tax Regime remains in place, with those who choose it still able to benefit from investment exemptions before their taxable income is determined.
After surcharges, the highest applicable tax rate in India has also decreased from 42.7 percent to 39 percent.
