The exemption limit has been raised to Rs 7 lakh for those opting for the new tax regime. Earlier it was Rs 5 lakh.
New Delhi : Presenting the budget, Union Finance Minister Nirmala Sitharaman has given great relief to traders, entrepreneurs and employees. Sitharaman has announced tax exemption for income up to Rs 7 lakh. But for employees it will be 7.5 lakhs. But the business class will have only 7 lakhs. In such a situation, tax payers have got a big relief. Changes have also been made in the tax structure.
Earlier there were six slabs of tax. Now it has been reduced to five. Even this will make a difference. But what difference is it really going to make? Experts have expressed their opinion about this.
how is the new structure
It will opt for a new income tax regime in 2023-24. A taxpayer adopting the old tax system will continue to pay tax as before. The exemption limit has been raised to Rs 7 lakh for those opting for the new tax regime. Earlier it was Rs 5 lakh. Another relief has been given to the salaried class in the budget. Standard deduction of Rs 50,000 has been included in the new tax regime.
what is the difference between the two
That is, the employees will not have to pay any tax on salary up to Rs 7.5 lakh. But if you are earning from a business instead of a job, then you will not get the benefit of standard deduction. That is, if your income is more than Rs 7 lakh, then you will have to pay tax.
2 options to file return
There are 2 options to file Income Tax Return i.e. ITR. The new option was given on 1st April 2020. The government has made the new tax system the default option. That is, the exemption from income tax in the budget will be applicable only on this. If you opt for the old tax regime, you will not get this exemption. If you opt for the old tax regime, you will need to provide all the documents for your investment and pay tax as per the old tax slab.
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