Articles

Union Budget 2020 – See what went in and what came out for taxpayers in this budget

by Nancy Singh Entertainment

With Union Budget, Finance Minister Nirmala Sitharaman claims for a simpler tax structure as compared to the complicated existing one. The new tax structure takes care of those who are not able to take benefit of the exemptions and reliefs offered by government. The new tax slab might succeed in bringing some parity between the high end and low-income taxpayers by breaking up the tax slab further. Just a quick glance and you can see that this will help the middle-class section, which is a big section of tax paying population.

It does seem that the removal of tax exemptions will make compliance easy but there still will be large number of taxpayers who will find old system more beneficial. We suggest that you look at this chart given below and decide for yourself, depending on your annual income.

OLD RATE

INCOME (annual)

NEW RATE

NIL

Up to 2.5 Lacs

NIL

5%

2.5 to 5 Lacs

5%

20%

5 to 7.5 Lacs

10%

7.5 to 10 Lacs

15%

10 to 12.5 Lacs

20%

30%

12.5 to 15 Lacs

25%

<15 Lacs

30%

What’s out
About 70 exemptions and deductions that you don’t get in new tax slab.

ü  Section 80C investments

ü  House rent allowance

ü  Housing loan interest

ü  Leave travel allowance

ü  Medical insurance premium

ü  Standard deduction

ü  Savings bank interest

ü  Education loan interest

 

What’s in
About 50 tax exemptions are left untouched. These include:


ü  Standard deduction on rent

ü  Agricultural income

ü  Income from life insurance

ü  Retrenchment compensation

ü  VRS proceeds

ü  Leave encashment on retirement

 

Few important points to note are;

* NO change has been done for incomes up to Rs 5 Lacs, and this is a good news for taxpayers falling under this slab.
* Deductions for Rs 30 lakh, Rs 60 lakh, Rs 1.2 crore: Rs 1.5 lakh under Sec 80C; Rs 50,000 standard deduction; Rs 25,000 under Sec 80D; Rs 2 lakh home loan interest under Sec 24.

* Salaried taxpayers who opt for the new slab, will have to let go of exemptions and reliefs, even LTA.


While the tax structure is renewed but the surcharge on the tax remains unchanged.
The liberating part about the new tax structure is that the taxpayers can choose the structure that is fit for their annual income slab and forgo the benefit of exemption.

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About Nancy Singh Advanced   Entertainment

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Joined APSense since, September 12th, 2019, From Mumbai, India.

Created on Feb 4th 2020 02:56. Viewed 125 times.

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