Budget 2020: Nirmala Sitharaman Unveils New Personal Income Tax Regime

Union Finance Minister Nirmala Sitharaman unveiled the Modi government's new Personal Income Tax regime which she asserted simplified the tax structure for the individual. During the course of her budget speech, she highlighted a rehaul of the tax structure for the forthcoming financial year.

Tax-payers with an annual income of Rs. 2.5 lakhs to 5 lakhs will be taxed at 5% instead of 10%.

Those with an annual income of Rs.5 lakhs to Rs. 7.5 lakhs will pay 10% instead of 20%

Tax-payers with an annual income of Rs. 7.5 lakhs to Rs. 10 lakhs will be taxed at 15% instead of 20%.

The prevailing tax rate of 30% for those in the bracket of Rs. 10-12.5 lakhs per annum has been brought down from 30% to 20%.

Tax-payers in the range of Rs. 12.5-15 lakhs per annum will be taxed at 25% instead of 30%.

In continuation with the current year's policy, those earning up to 5 lakhs per annum, will not be taxed.

The Finance Minister pointed out that a person earning Rs. 15 lakhs annually and not availing deductions will get a reduction of 78,000.

Further, she emphasised that the new tax regime is optional. Taxpayers can continue to remain in the old regime if they so choose.

The Finance minister said the new tax regime would generate 40,000 crores and will not need the help of experts and professionals.