Tax Knowledge: Words like tax slab, income tax, and new tax regime were used a lot in the budget speech, what do they mean..
Finance Minister Nirmala Sitharaman presented the first budget of the third term of the Modi government on 23 July. During this, he has announced new schemes from rural areas to urban development. Apart from this, income tax rules have also been amended.
During the budget speech, FM Nirmala Sitharaman used words like tax slab, income tax rate, and new tax regime several times. Let us know about them in easy language.
What is an Income Tax Slab?
Tax is levied on income earned by the Government of India. This tax is applicable on the limit of income, which is called tax slab and these keep changing year after year. In this time's general budget also, changes have been made to the rules regarding tax.
What is the New Tax Regime?
In India, income tax is currently levied in two ways. It includes old and new tax regimes. There has been no change in the old tax regime in this time's budget. At the same time, the new tax regime has been updated. Income tax will be collected in this way in the new tax regime-
0% on income up to Rs 3 lakh
5% on income from Rs 3 lakh to Rs 7 lakh
10% on income from Rs 7 lakh to Rs 10 lakh
15% on income from Rs 10 lakh to Rs 12 lakh
20% on income from Rs 12 lakh to Rs 15 lakh
30% on income above Rs 15 lakh
How much income will be taxed?
Finance Minister Nirmala Sitharaman has said that under the new system, tax exemption on income up to Rs 3 lakh will continue. According to the new proposal, a 5 percent tax will be levied on income of Rs 3-7 lakh, 10 percent between Rs 7-10 lakh and 15 percent on Rs 10-12 lakh.
Who will not have to pay tax?
The tax exemption limit for individuals choosing the new tax system has been set at Rs 3 lakh. If your annual income is less than Rs 3 lakh, you will not have to pay income tax. At the same time, people with an annual income of more than Rs 3 lakh will be taxed according to the tax slab.
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