Government of India, finance ministry may revised the income tax slab in upcoming finance budget 2020, which is going to declare in parliament in first week of February 2020, by finance minister Nirmala Sitaraman. It has been said by reporting agencies that new tax slab will be relaxing for the tax payers.
Current income tax slab is, those who earning up to Rs 2.5 lakh per year are exempted from paying income tax while individuals earning between Rs 2.5-5 lakh attract a 5% tax rate and those in the income group of Rs 5-10 lakh are taxed at 20%. Individuals earning above Rs 10 lakh have to pay tax at 30%. Those in the income bracket of Rs 1 crore, Rs 2 crore and Rs 5 crore come under a three-layered surcharge.
Akhilesh Ranjan, a former member of the Central Board of Direct Taxes (CBDT), suggested a new tax slab which will benefit the middle and upper middle class tax payers. Although new tax slab is not yet confirmed and released by income tax department or finance ministry.
Purposed tax slab may have an additional slab of 10% of income tax for person who earn between 5 to 10 Lakh.
Those person who are earning more than Rs 50 lakh in a FY have to pay an additional surcharge between 10% to 37%, depending on their income. The proposed slabs are currently being reviewed by a committee for direct taxes.
New income tax slabs for 2020
Income
|
Existing Tax Rate
|
Proposed tax rate
|
Up to ₹2.5 lakh
|
Nil
|
Nil
|
₹2.5 lakh to ₹5 lakh
|
Nil
|
10%
|
₹5 lakh to ₹10 lakh
|
10%
|
10%
|
₹10 lakh - ₹20 lakh
|
30%
|
20%
|
₹20 lakh - ₹ 2 crore
|
30%
|
30%
|
₹2 crore +
|
30%
|
35%
|
Above is the new purposed tax slab for FY 2020-21, but officially not yet confirmed. The relaxation which was given last year for tax payer who are earning less than 5 Lakh will be also revoked.
References:
- https://a.msn.com/r/2/BBYlolB?m=en-in&referrerID=InAppShare
- https://www.businessinsider.in/policy/economy/news/income-tax-slabs-for-2020-and-cuts-proposed-by-finance-minister-nirmala-sitharaman-in-next-budget/articleshow/72975148.cms
- https://www.businesstoday.in/current/economy-politics/union-budget-2020-modi-govt-may-cut-income-tax-rate-fm-nirmala-sitharaman-new-slab-to-boost-consumption/story/392628.html
- https://www.livemint.com/budget/expectations/income-tax-rate-may-be-cut-in-budget-report-11575441227503.html
- https://economictimes.indiatimes.com/news/economy/policy/middle-class-may-gain-from-lower-tax-rates-in-budget-fy21/articleshow/72353278.cms
- https://thewire.in/economy/india-income-tax