Revised Income Tax Slabs
| 0-2,50,000 | 0% |
| 2,50,000-5,00,000 | 5% |
| 5,00,000-7,50,000 | 10% |
| 7,50,000-10,00,000 | 15% |
| 10,00,000-12,50,000 | 20% |
| 12,50,000-15,00,000 | 25% |
| 15,00,000 above | 30% |
– 10% for income between Rs 5 lakh-7.5 lakh against 20%.
– 15% for income between Rs 7.5 lakh-10 lakh against 20%
– 20% for income between Rs 10-12.5 lakh against 30%
– 25% for income between Rs 12.5 -15 lakh against 30%
– 30% for income above Rs 15 lakh
Explaining the new tax relaxations, Finance Minister says that a person who earns Rs 15 lakh per annum and is not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now.
TDS to be deducted by e-commerce operators of Participates.
Budget provides e-commerce operators to deduct TDS on all payments to e-commerce participants at 1 per cent with PAN/Aadhaar, 5 per cent in non-PAN/Aadhaar. E-commerce operators will now have to deduct TDS on all payments to e-commerce participants at 1 percent with those having PAN/Aadhaar and 5 percent for those without non-PAN/Aadhaar.
Dividend Distribution Tax Shifted to Individuals Instead of Firms
Dividend distribution tax has been shifted to individuals instead of companies. In her second Budget presentation, the Finance Minister said concessional tax rate of 15 per cent has been extended to power generation companies. The government plans 100 per cent tax concession to sovereign wealth funds on investment in infra projects, further concessional withholding rate of 5 per cent on interest payment to non-residents has been extended up to June 30, 2022.
Reduction of tax on cooperative societies
Proposed reduction of tax on cooperative societies to 22 per cent plus surcharge and cess, from 30 per cent at present. Presenting the Budget for 2020-21, FM also announced extending by one year the date of approval of affordable housing projects for availing tax holiday on profit earned by developers. FM also announced extension of additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021.
Key Changes:
– To introduce a new simplified personal tax regime
– No income tax for income up to Rs 5 lakh
– 10% income tax for those earning between Rs 5 lakh to Rs
7.5 lakh versus 20% earlier
– 15% income tax for those earning between Rs 7.5-10 lakh
versus 20% earlier
– 20% income tax for those earning between Rs 10-12.5 lakh
versus 30% earlier
– 25 income tax for those earning between Rs 12.5-15 lakh
versus 30% earlier
– Income above Rs 15 lakh to continue to pay tax at 30%
– New income tax scheme is optional, without exemptions
– Dividend Distribution Tax (DDT) abolished, shifted to
individuals instead of companies
– Removes 70 exemptions, deductions with a view to further
simplify tax regime
– Govt mulls changes in PFRDA Act; to separate it from NPS
Trust for govt staff
– To launch new direct tax dispute settlement scheme
– To bring instant allotment of PAN via Aadhaar