Finance Minister Nirmala Sitharaman has made a big announcement in the budget speech. The Finance Minister said that the new Income Tax Bill will be tabled in Parliament next week. Due to which many big changes will be seen.
Actually, the new Income Tax Act will be introduced in the Parliament during the budget session. This will be a new law, not an amendment to the existing Act. Recently this draft was with the Law Ministry. The main objective of the new Income Tax Act is to make the existing Income Tax Act, 1961 easy, clear and understandable.
What changes are possible in the new Income Tax law?
– The law should be written in simple language so that common people can understand it easily.
– Unnecessary and obsolete provisions will be removed.
– Tax litigation will be reduced.
– Compliance will be made easy for taxpayers.
– For this, the Income Tax Department has received 6,500 suggestions from the public and industry for these reforms.
Let us tell you, earlier Finance Minister Nirmala Sitharaman had said that more than 65 percent of taxpayers in the country have adopted the New Tax Regime, that is, 2 out of every 3 people are filing income tax under the New Tax Regime. This data has changed a lot in the last one year, because when the government implemented the New Tax Regime in Budget 2020, people were reluctant to adopt it.
New tax regime
– ₹0-₹3 lakh: Nil
₹3-₹7 lakh: 5%
₹7-₹10 lakh: 10%
₹10-₹12 lakh: 15%
₹12-₹15 lakh: 20%
Above ₹15 lakh: 30%
Old Tax Regime
– Income from Rs 0 lakh to Rs 2.5 lakh: 0%
– Income from Rs 2.5 lakh to Rs 5 lakh: 5%
– Income from Rs 5 lakh to Rs 10 lakh: 20%
– Income above Rs 10 lakh: 30%
It is worth noting that at present, under the old tax regime, there is a provision of 30% income tax on income above Rs 10 lakh, while in the new tax regime, there is a provision of 30% income tax on income above Rs 15 lakh.
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