Income tax: Today, the government has announced a tax exemption on income up to 12 lakhs, but people have many questions about it, such as if someone has a salary of 13 lakhs then how much tax will be levied on it? Along with this, the biggest confusion is that if there is a tax exemption on income up to 12 lakhs, will it have to pay only one lakh? The answer is- no.
There is also a question in people’s mind that if the salary is 13 lakhs, will we have to pay 15 percent tax? The answer is also- no.
The third question associated with this is that when the income of up to 12 lakh is tax free, then why has the government given this slab system, 5 percent income tax on income of 4 to 8 lakhs, why 10 percent income tax on income of 8 to 12 lakhs?
Now let’s answer all the questions one by one.
If your salary is 13 lakh rupees and we divide it into 4 parts according to the tax slab. First 4 lakhs, second 4 lakhs, third 4 lakhs and the remaining 1 lakh. There is no tax on the first 4 lakh rupees. Now 5 percent tax will be levied on the next part of 4 to 8 lakhs, that is, it will be 20 thousand rupees. Now 10 percent tax will be levied on the share of 8 to 12 lakh rupees. Which will be about 40 thousand rupees. Now the last 1 lakh rupees left. This 1 lakh rupees will come under the scope of 15 percent tax… Now 15 percent of 1 lakh is 15 thousand rupees. Now if we add tax on the entire amount, then it will be 75 thousand rupees. That is, a person with income of 13 lakhs will have to pay 75 thousand rupees as tax.
The tax system for salaried people will also work on this formula. For example, Rs 90,000 will be taxed on income of 14 lakh, Rs 105,000 on 15 lakhs and Rs 1,20,000 on 16 lakhs. According to the old tax slab, Rs 1,70,000 was to be paid at Rs 16 lakh, but according to the new slab, only Rs 1,20,000 will have to be paid. That is, he will benefit here too.
Know how much tax you will save
Who will get the benefit of tax exemption?
Many people are confused that this decision has been implemented only for employed people, although the government has clearly stated in the budget that you are employed, do some businesses or run shops, if your annual income is 12 lakh or less then you do not need to pay income tax. An advantage for the employed people in this is that they will continue to get the benefit of standard deduction of 75 thousand rupees with this exemption. For example, if the annual salary of a employed person is 12 lakh 75 thousand rupees, then with a standard deduction of Rs 75 thousand, his salary will be 12 lakhs and he will not have to pay any income tax.
