Actually the government has changed the slab of tax. Now, according to the new slab, no tax will have to be paid by those earning up to Rs 3 lakh, which used to be Rs 2.5 lakh earlier. The government has now reduced the number of income tax slabs from 7 to 5.
In the budget, Nirmala Sitharaman has given great relief to the farmers, health sector and especially the salary class. Especially those with Rs 7 lakh will no longer have to pay any tax. So you must be thinking that what will happen to those whose salary is above 7 lakhs, then you do not need to worry. Let us explain you the complete maths of tax.
Actually the government has changed the slab of tax. Now, according to the new slab, no tax will have to be paid by those earning up to Rs 3 lakh, which used to be Rs 2.5 lakh earlier. The government has now reduced the number of income tax slabs from 7 to 5. 5% on Rs 3 to 6 lakh, 10% on Rs 6 to 9 lakh, 15% on Rs 9 lakh to 12 lakh, 20% on Rs 12 lakh to 15 lakh, 30% on income above Rs 15 lakh have to give.
today’s big news
How much tax on how much salary?
income tax slab
Under the new tax regime, a person with an annual income of Rs 15 lakh will have to pay a tax of Rs 1.5 lakh, which was earlier Rs 1.87 lakh. Rs 3 to 6 lakh will be taxed at 5 per cent and Rs 6 to 9 lakh at 10 per cent, Rs 9 lakh to Rs 12 lakh at 15 per cent and Rs 12 lakh to Rs 15 lakh at 20 per cent and income above Rs 15 lakh at 30 per cent.
understand math like this
- Those earning 0-3 lakh rupees annually will not have to pay any tax.
- 5% tax will have to be paid on earning Rs 3-6 lakh, which will be a liability of Rs 15,000. This means that 5% of Rs 3 lakh is Rs 15,000.
- 10% tax will have to be paid on earning of Rs 6-9 lakh, which will be a liability of Rs 45 thousand. This means that according to the first slab, there is a difference of Rs 15 thousand and Rs 3 lakh in 6 to 9 lakh. In this case, 10% of Rs 3 lakh is Rs 30,000, so the total liability becomes Rs 15,000 plus Rs 30,000, ie Rs 45,000.
- Similarly, those earning Rs 9 to 12 lakh annually will have to pay 15 per cent tax ie Rs 90,000 tax. This means that there is already a tax of Rs 45,000 on income up to Rs 9 lakh, and between 9 and 12 lakh, 15% of Rs 3 lakh becomes 45,000, so the total tax liability becomes Rs 90,000.
- Those earning Rs 12 to 15 lakh annually will have to pay 20 per cent. Up to Rs 12 lakh, already 90 thousand tax has to be paid, after that 20 percent tax on Rs 3 lakh means that Rs 60 thousand extra. That is, people coming in this slab will have to pay Rs 1.50 lakh.
- Those earning more than Rs 15 lakh will have to pay 30 per cent tax. Up to Rs 15 lakh is already Rs 1.50 lakh, then 30% more will have to be paid on earning more than that.
You will have both options
Now the common man will effectively not have to pay any income tax up to Rs.7 lakh. For the time being, both types of tax system will continue in the country. At the same time, the Finance Minister said that the government is developing the new tax system as a default tax regime, but citizens will still be able to take advantage of the old tax system.
7 lakh people will get benefit like this
Finance Minister Nirmala Sitharaman, while making announcements related to direct tax ie income tax, said that at present tax rebate is available on income up to Rs 5 lakh in the old and new tax regime. That is, in both the tax regimes, people do not pay any tax on income up to Rs 5 lakh. Now in the new tax regime, he has proposed to increase the tax rebate limit to Rs 7 lakh. While no new announcement has been made regarding any change regarding tax rebate in the old tax system.
What is the government’s tax math
Actually the government has changed the tax slab. In simple language, no tax has to be paid on the first income of 0 to 5 lakhs. Now the government has divided the tax slabs from 0 to 9 lakhs into three pieces. According to the new slab of the government, the salary of Rs 7 lakh will get its benefit.
Those in the old income tax regime should understand in this way
No tax up to 3 lakhs Slab reduced from 6 to 5 TDS of minimum 10000 removed
Standard deduction will also be available
As announced by Finance Minister Nirmala Sitharaman
Income tax relief has also been given to the salary and pensioners class in the new regime. They will now get the benefit of standard deduction in the new tax regime. Any salaried person whose income is Rs 15.5 lakh will get a benefit of Rs 52,500.
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