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NEW PERSONAL INCOME TAX REGIME HERALDS SIGNIFICANT RELIEF, ESPECIALLY FOR MIDDLE CLASS TAXPAYERS NEW TAX REGIME TO BE OPTIONAL FOR THE TAXPAYERS NEW RATES ENTAIL ESTIMATED REVENUE FORGONE OF Rs 40,000 CRORE PER YEAR In order to provide relief to the individual taxpayers and to simplify the Income-Tax law, the Union Budget proposes to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain
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FAQ :
It's a new, simplified personal income tax system with significantly reduced tax rates, designed to provide relief to individual taxpayers.
No, the new tax regime is optional for taxpayers. Individuals can choose to continue with the old regime if they benefit more from existing deductions and exemptions.
The new rates are: 5% on income between £2.5-5 lakh, 10% between £5-7.5 lakh, 15% between £7.5-10 lakh, 20% between £10-12.5 lakh, and 25% between £12.5-15 lakh. Income up to £2.5 lakh remains exempt, and income above £15 lakh is taxed at 30%.
A person earning £15 lakh annually and not claiming deductions could save £78,000 in tax compared to the old regime, paying £1,95,000 instead of £2,73,000.
The new personal income tax rates are expected to result in an estimated revenue forgone of £40,000 crore per year.
Around 70 existing exemptions and deductions have been proposed for removal in the new regime, with further reviews planned to simplify the tax system.
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