In the new tax regime, the role of planning your finances and keeping eye on your goals becomes all the more important.
From the point of view of personal income tax, the Budget 2020 may very well be called a turning point for individual tax payers in the country. Taking cues from the Direct Taxes Code envisaged way back in 2009, the government has paved way for a simplified tax regime. By simplification, it means, in the New Tax Regime there will be lower tax rates but no income tax exemptions and deductions available for reducing tax liability. So, you earn income and pay tax based on the income tax slab, with no exemptions and deductions available to avail.
You might also be interested to read: Work From Home Is The Bug Fix For Technology Companies Operating In India
What’s new – The new income tax slabs
As per the new tax regime, the new income tax slabs for FY 2021-22 will have more number of income slabs. Presently, the tax rates are 5, 20 and 30 per cent. So, for someone whose income increases from the lowest slab where he or she is paying 5 per cent, the applicable tax rate is 20 per cent.
Source: Financial Express