While announcing the last full Budget of the Modi government, Finance Minister Nirmala Sitharaman on Wednesday said that the new tax regime is being made the default tax regime. The FM also announced a hike in the income tax rebate limit from ₹5 lakh to ₹7 lakh under the new tax regime.
“Currently, those with an income of ₹5 lakh do not pay any income tax and I propose to increase the rebate limit to ₹7 lakh in the new tax regime,” the Finance Minister said.
As per the new tax slabs under the new tax regime, 5 percent tax will be applicable on total income between ₹3 lakh and ₹6 lakh while a tax rate of 10 percent will be levied on ₹6 lakh to ₹9 lakh income. ₹9 lakh to ₹12 lakh income will draw 15 percent tax while 20 percent tax will be levied on ₹12 lakh to ₹15 lakh. Income of ₹15 lakh and above will draw 30 percent tax.
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Revised tax slabs under new tax regime:
-Income of ₹0-3 lakh: nil.
-Income above ₹3 lakh and up to ₹6 lakh: 5%
-Income of above ₹6 lakh and up to ₹9 lakh: 10%
-Income of above ₹9 lakh and up to ₹12 lakh: 15%
-Income above ₹12 lakh and up to ₹15 lakh: 20%
-Income above ₹15 lakh: 30%
Old tax slabs under new tax regime:
-Income up to ₹2.5 lakh: nil
- ₹2.5 lakh to ₹5 lakh: 5%
- ₹5 lakh to ₹7.5 lakh: 10%
- ₹7.5 lakh to ₹10 lakh: 15%
- ₹10 lakh to ₹12.5 lakh: 20%
- ₹12.5 lakh- ₹15 lakh: 25%
-Above ₹15 lakh- 30%
