Income Tax Slab 2020: Big relief for taxpayers! FM announces new income tax slabs; Check benefits

Income Tax Slab 2020: Paying heed to the common man's aspirations, Finance Minister Nirmala Sitharaman decided to target two birds with a single stone. She announced new income tax slabs while the status quo has been maintained on income up to Rs 5 lakh - no tax to be paid by those earning up to this amount. Importantly, Zee Business Managing Editor Anil Singhvi had raised a big demand for the reduction of income tax to give relief to individuals and put money in their pockets and thereby power the economy. As expected by the experts, this tax relief would help FM to increase the purchasing power capacity of the common public leading to a rise in liquidity in the market. 

While presenting the Union Budget (#BudgetOnZee) Nirmala Sitharaman said, "I propose to announce no income tax liability for an earning individual on income up to Rs 5 lakh per annum." She said that an income taxpayer earning from Rs 5 lakh to Rs 7.5 lakh will have to pay 10 per cent tax on income. FM announced a new income tax slabs of Zero to Rs 5 lakh, From Rs 5 lakh to Rs 7.5 lakh, from Rs 7.5 lakh to Rs 10 lakh, from Rs 10 lakh to Rs 12.5 lakh, from Rs 12.5 lakh to Rs 15 lakh and a slab for a taxpayer earning above Rs 15 lakh.

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Here is the new income tax list of proposed rates to be imposed on an earning individual in budget 2020:

- Status quo on zero to Rs 5 lakh income tax slab;

- An income taxpayer earning from Rs 5 lakh to 7.5 lakh to pay 10 per cent;

- An income taxpayer earning from Rs 7.5 lakh to Rs 10 lakh to pay 15 per cent;

- An income taxpayer earning from Rs 10 lakh to 12.5 lakh to pay 20 per cent only;

- An income taxpayer earning from Rs 12.5 lakh to Rs 15 lakh to pay 25 per cent income tax; and

- A taxpayer earning above Rs 15 lakh per annum will have to pay 30 per cent of one's income.

Commenting upon the new income tax slab announcements Alok Agrawal, Partner, Deloitte India said, “There are some key developments and focus made by the Govt of India towards the personal tax regime including DTT abolished to attract investors and provides relief Dividend taxable only in hands of recipient at applicable rates Additional Interest deduction of 1.5 lacs for housing loans for affordable housing extended up to 31st March 2021.”