EastMojo
www.eastmojo.com
Finance minister Nrimala Sitharaman and her team with President Ram Nath Kovind before presenting Budget 2020
Finance minister Nrimala Sitharaman and her team with President Ram Nath Kovind before presenting Budget 2020|PIB image
NATIONAL

Budget 2020 | Major tax cuts: Here’s how much you have to pay now

No tax up to Rs 5 lakh income; 10% for Rs 5 lakh-Rs 7.5 lakh income, down from existing 20%; tax of 20% for Rs 7.5 lakh-Rs 10 lakh income, down from 30%, & so on

Team EastMojo

Team EastMojo

New Delhi: In a major step to boost growth and put the economy back on track, Union finance minister Nirmala Sithraman on Saturday announced tax cuts. As per the simplified new personal income tax regime to be effective from April 1, 2020, those earning up to Rs 5 lakh have been exempted from paying any tax.

Those earning between Rs 5 lakh and Rs 7.5 lakh will now be paying 10% tax, down from the existing 20%. Between Rs 7.5 lakh to Rs 10 lakh earnings per annum, the tax outgo would be 15%, down from 20%.

For all those earning between Rs 10 lakh and Rs 12.5 lakh per annum, the tax rate has been fixed at 20%, down from 30%, for per annum earnings of Rs 12.5 lakh to Rs 15 lakh, the tax rate will be 25% and for all those earning Rs 15 lakh and above, the tax rate remains the same at 30%.

Budget 2020 | Major tax cuts: Here’s how much you have to pay now

Giving an example, the FM said that anyone earning Rs 15 lakh per annum, would end up saving up to Rs 78,000 if he or she is not availing any deduction as is available under the existing tax regime.

The new tax regime is optional and would be available to those who are willing to forego some exemptions and some deductions, the finance minister said.

The move would cost the government coffers an estimated Rs 40,000 crore.

For more such stories, follow us on Facebook, Twitter and Instagram. Activate Website Notifications to stay updated.