Is your annual income below 3 lakhs? Then can relax, major changes in income tax structure

NEW DELHI: Finance Minister Nirmala Sitharaman announced comprehensive reforms in the income tax structure. While presenting the budget, she said this will lessen disputes and is planning to complete the procedures within six months.

Standard deduction in the new tax rule will be increased from Rs 50,000 to Rs 75,000. There is no tax if the annual income is up to Rs 3 lakh. The tax is 5% if the income is between three to six lakh, 10% between Rs 6 lakhs to 9 lakh,15% between 9 to 12 lakhs and 20% to 12 to 15 lakhs. If the annual income is above Rs 15 lakh, the tax is 30 percent.

Sitharaman said workers will save up to Rs 17,500 in income tax under the new tax regime. In 2020, she introduced a new personal income tax regime in addition to the existing personal income tax slabs. It was simpler. However, those opting for the new income tax regime were not entitled to many tax exemptions under various IT Act sections. Corporate tax for foreign firms has been reduced to 35 percent.