Budget 2021 Expectations: Taxpayers want the old income tax regime to continue

by Jeremy

The new income tax regime contains seven tax slabs compared to four tax slabs under the old income tax regime. Union Budget 2020-21 Expectations for Income Tax: In the last year’s Union Budget, Finance Minister Nirmala Sitharaman had introduced a new income tax regime that contains seven tax slabs – Nil, 5 percent, 10 percent, 15 percent, 20 percent, 25 percent, and 30 percent – in comparison to four tax slabs under the old income tax regime – Nil, 5 percent, 20 percent, and 30 percent. Both the tax regimes will continue and it will be optional for the taxpayers to choose a rule, Sitharaman declared in her budget speech. Although the new income tax regime has lower tax rates on income between Rs 5 lakh to Rs 15 lakh, no tax exemptions and deductions will be available in the government.

 

As a result, a salaried taxpayer would lose the current benefits of over Rs 5 lakh in the forms of exemptions and deductions available under various sections in the old income tax regime by switching to the new income tax regime. I have to pay additional tax of over Rs 1 lakh if the old income tax regime is discontinued,” said Saral Dev (name changed), who is a government employee and had taken home loan to purchase a flat in 2019.

New income tax regime vs old: What is good for you? Check comparison

Related Posts

Leave a Comment