In her budget speech, Finance Minister Nirmala Sitharaman announced that taxpayers who earn a salary of up to Rs 12 lakh would not be required to pay income tax.
The FM emphasized that the new income tax regime will have a special focus on benefiting the Indian middle class population. She stated that the new regime will be simpler and that the income tax slabs and rates are being revised across the board.
This aims to establish a more progressive taxation system.
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RELIEF FOR THE MIDDLE CLASS
This will be under the new tax regime. There will be zero income tax for earnings up to Rs 12 lakh (meaning Rs 12.75 lakh with a standard deduction of Rs 75,000).
It is pertinent to note that this means that people earning an annual salary of up to Rs 12,75,000 will not be required to pay any tax.
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NEW TAX SLABS
Along with this, there are some changes in the tax slabs.
According to India Today, the new tax slabs and rates are:
With these revised tax slabs, the Government of India aims to significantly ease the tax burden on the country’s middle-class population. This is expected to leave more money in the hands of the people and boost their household consumption, savings, and investment.
According to Moneycontrol, some important points to be noted are:
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The new tax slabs are simplified with lower rates for middle-income earners.
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Individuals earning up to Rs 25 lakh will receive benefits up to Rs 1.1 lakh.
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For income above Rs 24 lakh, individuals will be taxed at a maximum rate of 30%.
Highlighting the Government’s goal to recognize the middle-class section of the country, Manmeet Kaur, Partner at Karanjawala & Co, said, “The Government aims at Democracy, demography and demand recognising the middle class. Minimum tax slab raised to Rs 12 lakhs from Rs 7 lakhs in new regime + Rs 75000 standard deduction. Aims to boost both consumption and savings/investments.”
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