Budget 2020 Income Tax Slab Rates Changes Expectations: Presenting her second Union Budget in Parliament Saturday, Finance Minister Nirmala Sitharaman cut tax rates significantly for the salaried class, giving them relief, but provided they forgo exemptions. For financial year 2020-21, people earning up to Rs 5 lakh will not have to pay any income tax while those with income between Rs 5 lakh to Rs 7.5 lakh will have to pay 10 per cent of income tax, this is half of what they are paying now. Also, there will be 15% tax for income between 7.5 lakh to 10 lakh and 20 per cent tax for income between 10 lakh to 12.5 lakh. The Finance Minister also said people earning between Rs 12.5 lakh to Rs 15 lakh will have to pay 25 per cent of tax while those with income above Rs 15 lakh will pay 30 per cent tax.
So, as per the new announcements, a person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now. Sitharaman also said Rs 40,000 crore per annum will be revenue foregone from new income tax rates for individuals and that the government has removed 70 exemptions, deductions with a view to further simplify tax regime.
Nirmala Sitharaman, however, said the government expected tax buoyancy will take time and the recent cut in corporate tax will cause loss of substantial revenue in short-run and that economy will reap huge returns in due course.