New Slab rates for Individuals if no exemptions/deduction

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New Slab rates for Individuals if no exemptions/deduction

New Slab rates for Individuals if no exemptions/deduction

An Optional Tax Regime Sec 115BAC

Finance Minister Nirmala Sitharaman has proposed a new optional tax regime in the budget 2020 for the FY 2020-21 with low rates of taxes, however, to opt new rates, benefits of popular deductions like 80C, 80D , home loan interest benefits has to foregone.

The comparison of new Income-tax slab rates with Old rates applicable under the new tax regime would be as follows:

Slab Rates New Rate of Tax Old Rate of Tax
Upto to INR 2,50,000 Nil Nil
INR 2,50,001 to INR 500,000 5% 5%
INR 500,001 to INR 750,000 10% 20%
INR 750,001 to INR 10,00,000 15%
INR 10,00,001 to INR 12,50,000 20% 30%
INR 12,50,001 to INR 15,00,000 25%
Above INR 15,00,000 30%

Surcharge & Cess would apply as per existing tax rates.

Partic-ulars Old New Old New Old New Old New Old New Old New
Salary 500 000 500 000 750000 750 000 1000 000 1000 000 1250 000 1250 000 15 Lakh 15 Lakh 20 lakh 20 lakh
Less: Dedu-ctions
HRA 25000 75000 100000 125000 150000 200000
Standard Dedu-ctions 50000 50000 50000 50000 50000 50000
LTA 27500 62475 83300 104125 124950 166600
Interest on Home Loan 50000 75000 100000 125000 150000 200000
80C 25000 100000 150000 150000 150000 150000
80D Medical 10000 25000 25000 25000 25000 25000
Net taxable income 312 500 500 000 362525 750 000 491700 1000 000 670875 1250 000 850 050 15 Lakh 1208400 20 Lakh
Tax 3125 12500 5626 37500 12085 75000 46675 125000 82510 187 500 175020 337500
Rebate u/s 87A 3125 12500 5626 12085
Net Tax Payable 37500 75000 46675 125000 82510 187 500 175020 337500
Add: Cess @ 4% 1500 3000 1867 5000 3300 7500 7001 13500
Total Tax payable 39000 78000 48542 130000 85810 195 000 182021 351000

New tax rate u/s 115BAC are optional for  individuals who wants to avail deductions/exemption can choose to tax under existing rates. Also, there has been no changes in section 87A i.e. there is no tax for individuals earning taxable income up to INR 5,00,000 under both regime.

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