New Delhi: Finance Minister Nirmala Sitharaman presented the budget for FY 2021-22. In the budget, the government’s focus was on boosting the economy through health, infrastructure and reform. The Finance Minister has increased the health budget. The Finance Minister has taken the initiative to give relief to the industry by not imposing any new tax. The government has announced to increase government spending irrespective of the fiscal deficit.
The government has given the taxpayer the right to choose the option to pay tax under the new tax regime or old tax regime. Personal tax payers are not being given any benefit of all other tax exemptions including Section 80C, 80D, LTC, HAA under the new tax regime. The Finance Minister had proposed to levy 10 percent tax on income ranging from Rs 5 lakh to Rs 7.5 lakh annually. Earlier, tax was payable at the rate of 20 percent. 15 percent tax is payable under the new tax regime on income ranging from 7.5 lakh to 10 lakh rupees annually.
20 percent tax has to be paid on annual income ranging from Rs 10 lakh to Rs 12.5 lakh. Earlier, this income used to be 30 percent tax. Those with annual income ranging from Rs 12.5 lakh to Rs 15 lakh have to pay 25 percent tax. Those with an annual income of more than Rs 15 lakh are getting taxed at the current rate of 30 percent.
A person who earns Rs. 15 lakhs in a year and does not want to avail any tax exemption, will have to pay only tax of Rs. 1.95 lakhs, which was earlier Rs. 2.73 lakhs. In this way, he is getting 78 thousand rupees in a year. Currently, income up to Rs 2.5 lakh is tax free. The rate of tax is 5% on annual income of 2.5 lakh to 5 lakh rupees. The tax rate in this slab becomes zero with deductions and exemptions.
No significant relief has been announced in the budget to income tax payers. There is no change in the income tax slab. However, senior citizens who are more than 75 years old and have income from pension and deposits, then announced exemption from their income tax returns.