The general budget will be presented on 1 February. The financial year 202-23 is about to end now. This time people are hopeful that the gift of income tax exemption will come out of Finance Minister Nirmala Sitharaman’s box.
Everyone’s eye remains on the tax slab in the budget. At present there are two slabs of income tax in the country. There are different provisions in both of these. If someone’s salary is 50 thousand, then how much tax will be deducted on the new or old tax slab, let us tell you about this.
Two slabs of tax
Talk about the change in tax slabs, in the last few budget sessions people have felt disappointed. At present there are two tax systems in the country. The first system is called Old Tax Slab. For the purpose of giving relief to the taxpayers, in the year 2020, the government had brought a new tax slab, so that there would be ease in ITR filing. For this a new system was also started. However, despite bringing the new slab, the government had retained the old tax slab.
How much tax from old system on 50 thousand salary
If the monthly salary is 50 thousand rupees and there is no other source of income then the annual income will be 6 lakh rupees. If you choose the old system, then a deduction of up to Rs 1.5 lakh is available under Section 80C of Income Tax (IT Act 80C). Employed people also get the benefit of standard deduction of Rs 50,000.
In the old system, there is no tax on income up to 2.5 lakhs. 5% tax has to be paid on income between Rs 2.5 lakh to Rs 5 lakh. But after the rebate of Rs 12,500 it becomes zero. That is, according to this slab, no tax will have to be paid on income up to Rs 5 lakh.
5,00,000(Income) – 5,00,000(Net Tax Deduction)= 0 Tax
How will tax be saved on an income of 6 lakhs in the new tax system?
In the new tax system, income up to Rs 2.50 lakh is tax free, but after that Rs 2.5 lakh will be taxed at 5%, which works out to Rs 12,500. A tax of Rs 24,400 is levied on salary up to Rs 6 lakh. If the income is more than Rs 5 lakh to Rs 1 lakh, then that amount of Rs 1 lakh will come in the bracket of 10%. A tax of Rs 10,000 will be made on this. Also, a cess of 4% will be levied on the calculated tax. If the tax is Rs 12,500, then the cess will be Rs 900.
How will the income of 6 lakh be tax free?
Under 80C, a rebate of up to Rs 1.5 lakh is available. For this you can invest in NSC, ELSS, PPF and EPF. Apart from this, if you invest Rs 50,000 in the National Pension System (NPS), then you will get an additional deduction of Rs 50,000 under 80CCD (1B). Home loan borrowers can save Rs 2 lakh separately.
Income 6,00,000-1,50,000 (PPF, EPF)= 4,50,000
4,50,000-50,000 (NPS)= 4,00,000
4,00,000-2,00,000 (Home Loan) = 2,00,000 (Tax Free)
