Accordingly government has slashed the income tax rates to 10% from existing 20% for those earning between Rs 5 lakh to 7.5 lakh and 15% for those earning between Rs 7.5 lakh and 10 lakh as compared to the existing 30%. For earnings between Rs 10 lakh to 12.5 lakh, the tax rates have been slashed to 20% tax from existing is 30%. "New Income Tax regime is optional. All exemptions will he taken away if opted for".
Perhaps the FY21 total expenditure at Rs 30.42 lakh crore, says FM. Net Market Borrowing for FY20 at Rs 4.99 lakh crore and net market borrowing for FY21 at Rs 5.36 lakh crore. Moreover Finance minister nirmala sitharaman says that loss of substantial revenue in short term due to corporate tax rate cut. Also when explaining the new tax relaxations, Finance minister nirmala sitharaman says that a person who earns Rs 15 lakh per anum and is not availing any deductions will now pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now.
Reportedly the revised income tax slabs is as follows.
10% for income between Rs 5 lakh-7.5 lakh against 20%.
15% for income between Rs 7.5 lakh-10 lakh against 20%
20% for income between Rs 10-12.5 lakh against 30%
25% for income between Rs 12.5 -15 lakh against 30%
30% for income above Rs 15 lakh.
This means lower tax rate for those in the Rs 5 to 15 lakh bracket.
Moreover nirmala sitharaman says currently more than 100 exemptions provided in I-T Act. Now around 70 of them have been removed in the simplified regime. Hence remaining will be reviewed over the coming years to simplify the system.
