Finance Minister Nirmala Sitharaman presented her second Union Budget a short while ago. As a part of her budget speech, Nirmala Sitharaman announced some relief to Taxpayers by rejigging the Personal Income Tax Slabs. The Government says that this movie will bring down the income tax outgo of those earning Rs 15 lakh a year by Rs 78,000 to Rs 1,97,000.
Under the proposal, people with an annual income of Rs 5 lakh to Rs 7.5 lakh will have to pay a reduced tax rate of 10 percent; between Rs 7.5 lakh and Rs 10 lakh 15 percent; between Rs 10 lakh and 12.5 lakh 20 percent; between Rs 12.5 lakh and 15 lakh 25 percent; and above Rs 15 lakh 30 percent.
However, this proposal comes with a catch. The proposal would lead to a revenue sacrifice of Rs 40,000 crore per annum. People opting for this new tax regime will have to forego all the tax exemption and deductions. Taxpayers will be given an option to choose either of these Tax regimes.
Financial Experts say that with this condition, the relief would be minor and will also involve a lot of hassle as the Taxpayers have to compute their tax outcome in both the regimes and decide which is beneficial to them.
