The 10th budget was presented yesterday by the Modi government. Finance Minister Nirmala Sitharaman has taken maximum care of the middle class while presenting the budget.
Next year, the Finance Minister will present the interim budget on 1 February. However, some provisions were made for tax payers in this budget, which are not easily understood by everyone. This time the government has made 0 tax on income up to 7 lakhs. But there is a screw stuck here, maybe even you could not understand it.
This is the math of tax.
The government is constantly promoting the new tax regime. This is the reason why the government has made income up to 7 lakh tax free under this. But if your income is more than 7 lakhs, then you will have to pay tax, that too on the entire income of more than three lakhs. Under this, 5 percent income tax will have to be paid on income of 3 to 6 lakhs, 10 percent on income of 6 to 9 lakhs, 15% on 9 to 12 lakhs, 20% on 12 to 15 lakhs, 30% on more than 15 lakhs. Now some people here are eating gacha.
Standard deduction of 50000 is also included.
In fact, tax rebate is given by the government to tax payers under section 87A (87 A), which is applicable to income of 3 to 7 lakhs. According to the new tax regime, you have become free from any kind of tax liability on income up to 7 lakhs. Standard deduction of 50000 is also included in this, which means you will not have to pay any tax on income up to 7.5 lakhs. But if your salary increases even by Rs 200, (Rs 2400 annually) then you will get a penalty of Rs 25000. Let’s understand how-
Zero tax on an income of Rs 62,500
If your income is Rs 7.5 lakh annually, then you are being given the benefit of standard deduction of Rs 50,000 by the government. There was zero tax on the income of 7 lakhs. With an annual income of Rs 7.5 lakh, the income per month is Rs 62,500. Now let’s talk if your salary increased by Rs 200 then it increased to Rs 62,700.
Tax of Rs 25,240 on salary of Rs 62,700
If you earn Rs 62,700 every month, then your annual income is Rs 7,52,400. Here after getting the standard deduction of 50,000, the annual income has come down to Rs 7,02,400 i.e. above 7 lakh i.e. tax will have to be paid. 15 thousand tax at the rate of 5 percent on the income of three to six lakhs. On income between 6 to 9 lakhs, you will have to pay tax of Rs 10,240 on income of Rs 1,02,400. Together, you have a tax liability of Rs 25,240. You will not get any kind of rebate in this.
