Income tax: The new financial year has started from today and this year many such changes are going to happen which will directly benefit the middle class. One of these important decisions is related to income tax. On 1 February, Union Finance Minister Nirmala Sitharaman made several announcements related to the new income tax system, which came into force from 1 April. Let’s understand it one by one.
Rebate up to Rs 12 lakh
Finance Minister Nirmala Sitharaman, while giving great relief to the salaried and middle class, announced a complete discount from income tax of up to Rs 12 lakh in a year. This discount will be available to taxpayers who will opt for the new tax system. No tax will be incurred up to Rs 12.75 lakh for salaried taxpayers with a standard deduction of Rs 75,000. Apart from this, changes have also been made in the tax slab, which will save Rs 1.1 lakh to those earning up to Rs 25 lakh annually.
Who will benefit?
About one crore people will not have to pay any tax due to increase in income tax exemption from Rs 7 lakh to Rs 12 lakh. Changes in tax slab will benefit more than 6.3 crore people i.e. 80 percent taxpayers. Along with this, the tax exemption limit on interest for senior citizens has been increased from the current Rs 50,000 to Rs 1 lakh.
New income tax slab
Under the new tax system, if the annual income is more than Rs 12 lakh, then there will be no tax on income up to Rs 4 lakh. After this, 5 percent will be taxed on income ranging from 4 lakh to 8 lakh rupees, 10 percent on income ranging from 8 lakh to 12 lakh and 15 percent tax on income of 12 lakh to 16 lakh rupees. Apart from this, 20 percent will be levied on income ranging from Rs 16 to 20 lakh, 25 percent on income ranging from 20 to 24 lakhs and 30 percent tax on income of more than 24 lakh rupees.
Update ITR deadline is four years
It has been proposed to extend the time limit to 4 years for people filing updated Income Tax Return (ITR). Such returns are filed by taxpayers who are unable to inform their correct income within the stipulated time. Currently, such returns can be filed within two years of the financial year. So far, about 9 million taxpayers have voluntarily updated their income details by paying additional tax.
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