Finance Minister Nirmala Sitharaman presented the budget on Friday, bringing a major relief to the middle class. She announced that individuals earning ₹12 lakh per year will no longer have to pay any income tax. Previously, individuals earning ₹12 lakh had to pay ₹71,500 as tax. Let’s take a look at the new tax slabs and understand the benefits for various income levels.
- For those earning ₹12 lakh annually, there is no tax now, as opposed to ₹17,500 before.
- If your income is ₹13 lakh, previously you paid ₹88,400 in tax, but with the new slabs, you’ll only pay ₹66,300, saving ₹22,100.
- For individuals earning ₹15 lakh, the old tax was ₹1.30 lakh, but now it will be ₹97,500, providing a ₹32,500 benefit.
- For those earning ₹17 lakh, the previous tax was ₹1.84 lakh, but now it will be ₹1.30 lakh, saving ₹54,600.
Income Breakdown:
| Income | Old Tax | New Tax | Savings |
|---|---|---|---|
| ₹12 Lakh | ₹17,500 | ₹0 | ₹71,500 |
| ₹13 Lakh | ₹88,400 | ₹66,300 | ₹22,100 |
| ₹15 Lakh | ₹1,30,000 | ₹97,500 | ₹32,500 |
| ₹17 Lakh | ₹1,84,600 | ₹1,30,000 | ₹54,600 |
| ₹22 Lakh | ₹3,40,600 | ₹2,40,500 | ₹1,00,100 |
| ₹25 Lakh | ₹4,34,200 | ₹3,19,800 | ₹1,14,400 |
- For those earning ₹22 lakh, previously you paid ₹3,40,600 in tax, but now you’ll only pay ₹2,40,500, saving ₹1,00,100.
- For ₹25 lakh earners, the old tax was ₹4.34 lakh, but now it’s ₹3.19 lakh, saving ₹1,14,400.
Additionally, the Finance Minister announced that the government will introduce a new income tax bill next week, aimed at simplifying and making the tax system more transparent. The budget also includes a proposal to increase the Foreign Direct Investment (FDI) limit for the insurance sector, and the tax exemption limit for senior citizens on interest income will double to ₹1 lakh.
