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New Income Tax Slabs | Calculate your Tax Liability


  • By : abiZa Team
  • February 06, 2020

Budget 2020 has proposed to introduce new income tax slabs with reduced rates for those foregoing exemptions and deductions under a "simplified tax regime". This new system is optional and will co-exist with the old one with three slabs and various exemptions and deductions available to the taxpayer.

As per the budget proposals, if a taxpayer opts for the new regime, then his income will be taxed as per the following tax slabs:

Individuals having net taxable income of up to Rs 5 lakh will be able to avail tax rebate of Rs 12,500 under section 87A in both, the existing and new, tax regimes. Effectively, this would mean that individual taxpayers having net taxable income of up to Rs 5 lakh will continue to pay zero tax.

However, individuals opting for the new tax regime would not be able to avail common tax breaks such deductions under section 80C for maximum of Rs 1.5 lakh by investing in specified instruments,

On the other hand, individuals opting for the existing tax regime will continue to pay tax on their income in FY 2020-21 same as FY 2019-20. These tax proposals will come into effect from April 1, 2020, once these are passed by the Parliament.
 

Existing Tax Slabs

Rate of Tax

Upto 2,50,000

0%

From 2,50,001 to 5,00,000

5%

From 5,00,001 to 10,00,000

20%

Above 10,00,000

30%

 

New Tax Slabs

Tax Slabs

Rate of Tax

Upto 2,50,000

0%

From 2,50,001 to 5,00,000

5%

From 5,00,001 to 7,50,000

10%

From 7,50,001 to 10,00,000

15%

From 10,00,001 to 12,50,000

20%

From 12,50,001 to 15,00,000

25%

Above 15,00,000

30%

 

Calculate your Tax Savings by Clicking here