Tax exemptions, new tax rates
Budget 2020

Finance Minister Nirmala Sitharaman on Saturday introduced changes in tax slabs while presenting the budget for FY 2020-21. There will be no tax on income up to 2.5 lakh in the new tax system. Income from 2.5 lakh to 5 lakh will be taxed at 5%. Income from 5 to 7.5 lakh will be taxed at 10%. Earlier there was no slab of 10 percent. 7.5 lakh to 10 lakh income will be taxed at 15 per cent. There will be 20% tax on income from 10 lakh to 12.5 lakh. Under the new tax system, it will not include any deduction, those who want to take the deduction can pay tax at the old rates. That is, there will be an alternative arrangement for taxpayers. These new slabs will be applicable when the taxpayer relinquishes his second exemption or other exemption.
Under the new tax regime, income up to Rs 2.5 lakh will be tax free. Income from 2.5 to five lakhs will be taxed at the rate of five per cent, but there will be no tax on income up to this limit due to the relief of Rs 12,500.
The 12500 concession will remain in both the old and new tax slabs. (Due to this, tax of people with income up to 5 lakh will be zero).
Now this will be the new tax slab
No tax on earnings up to 2.5 lakhs
5% – 2.5 lakh to 5 lakh on earning
10% – 5-7.5 lakhs on earning
15% – 7.5 – 10 lakhs on earning
20% – 10 – 12.5 lakhs on earning
25% – 12.5 – 15 lakhs on earning
30% – On earning above 15 lakh and above
New tax slab system, keep in mind that the old tax system will also be applicable. People can choose either of these two.
Tax rate               Income
0%                     2.5 lakh to 5 rupees 
10%                   5 Lakh to 7.5 Lakh
15%                    7.5 Lakh to 10 Lakh
20%                    10 Lakh to 12.5 Lakh
25%                    12.5 Lakh to 15 Lakh
30%                    More than 1.5 million
– Under the new tax system, taxpayers earning an annual income of Rs 15 lakh will be saved 78 thousand rupees under the new tax slab.
– Earlier 39 percent of the cooperative societies were taxed. 14 concessions were withdrawn from custom duty.
– On the basis of Aadhaar, arrangements will be started soon regarding online allotment of PAN immediately, for this no application form will be required to be filled.
Slab of taxable income (in rupees) Current rates of income taxNew tax rates 30 percent above 30 percent
(Source PIB)
In the current income tax slab system, there is no tax on income below Rs 2.5 lakh. Those with income between 2.5 lakh and 5 lakh are kept in 5% slab. At the same time, those with 5-10 lakh income have to pay 20% tax. Those above Rs 10 lakh are taxed at 30 per cent. There is no tax on income up to this limit due to the concession of Rs 12,500 on slabs from 2.5 lakh to 5 lakh.
So far there were income tax slabs
Up to Rs 2,50,000 – Nil
2,50,001 to 5 lakhs on income – 5 percent
On income from 500001 to 10 lakh – 20 percent
The new income tax system is optional and taxpayers can stay in the old tax system with exemptions and deductions. It needs to be kept in mind that once the new tax system is chosen, this system will remain in force in the coming years as well. It has been proposed to remove some deductions in the new tax system. These include housing allowance (HRA), standard deduction, exemption under Section 80 of the Income Tax Act (insurance premium, provident fund and contribution to many pension schemes).
– Dividend distribution tax ended, now dividend payers will have to pay tax – Audit of accounts of businessmen up to five crore rupees not required: – Announcement of new ‘Dispute to trust scheme in disputed tax cases of indirect tax, only disputed tax amount will have to be paid by 31 March 2020, after that By June 30, 2020, some additional amount may have to be paid.