New Delhi: Union Finance Minister Nirmala Sitharaman presented the 8th Union Budget of the Modi government today. Car donors, waiting for a big relief from the Finance Minister, have got a chance to rectify the mistake in two years with only thanks and namaskar instead of relief in tax slabs. After which the Finance Minister has dashed the expectations of the taxpayers by making a record.
No change in tax slab
While presenting the Union Budget, the Finance Minister has not changed the direct tax tax in any way. The last time the then Finance Minister Arun Jaitley changed the tax slab was in 2014. Under which the tax free slab was increased from two lakhs to 2.5 lakhs. With this, it was increased from two and a half to three lakhs for the elderly.
Tax slab will remain like this
- Income up to Rs 2.5 lakh is tax free in both the options. Income between Rs 2.5 lakh and Rs 5 lakh attracts 5 per cent tax. However, exemption up to Rs 12,500 has been given under 87A of the Income Tax Act. This means that in both the options, there is no tax to be paid on income up to Rs 5 lakh.
- The new option attracts 10% tax on income of Rs 5 to 7.5 lakh and 15% on income of Rs 7.5 lakh to 10 lakh, while the old option attracts 20% tax on income of Rs 5 to 10 lakh.
- Income above Rs 10 lakh in the old option attracts 30% tax. In the new system, there is a 20% tax on income of Rs 10 to 12.5 lakh and 25% tax on Rs 12.5 lakh to 15 lakh. Income above Rs 15 lakh attracts 30% tax. The effective tax rate increases due to cess and surcharge.