Tax Tips:12 lakh is fine…but how much tax will be levied on income more than that, understand the complete math here..

Finance Minister Nirmala Sitharaman has given a big relief to the middle class. She has announced a huge exemption in income tax. The Finance Minister has increased its limit from 7 lakhs to 12 lakhs. This means that if someone's income is up to 12 lakhs, then he will not have to pay any tax. This does not mean that if someone's income is 15 lakhs, then only 3 lakhs will be taxed. Confused? No problem. We will tell you the whole math of this.

How much tax will have to be paid?

This exemption in income tax is applicable only on income up to 12 lakhs. If your income is more than 12 lakhs. In such a situation, you will have to pay tax according to the new tax slab. There is no tax on income up to 12 lakhs. At the same time, income from 12 lakhs to 16 lakhs will be taxed from 5 percent to 15 percent. As soon as your income is 12.1 lakhs, you will have to pay a tax of 61,500. If someone's income is 15 lakhs, then he will have to pay a tax of Rs 1,05,000.

Understand the math with an example.

Now you must be wondering how this calculation was done. Let us explain. Suppose Ram's income is Rs 4 lakh. In such a situation, the government will not take any tax from Ram. As soon as Ram starts earning more than Rs 4 lakh, he will come in the 5 percent tax bracket. In this bracket, Ram's maximum tax will be Rs 20,000 at the rate of 5 percent on Rs 4 lakh. Similarly, if Ram's income becomes 15 lakhs, then his tax will be added to it according to the tax slab and it will become Rs 1,05,000. You can see the list of tax slabs below.

Benefits only

What are the benefits for those with income of more than 15 lakhs, let us also know this. The Finance Minister has also given relief to those with income of more than 15 lakhs. Now the tax rate on income from 15 lakh to 24 lakh has been reduced. There is a 15 percent tax on income from 12 lakh to 16 lakh. There is a 20 percent tax on income from 16 lakh to 20 lakh. There is a 25 percent tax on income from 20 lakh to 24 lakh.

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