The federal budget has introduced a new system of accounting for personal income tax. Although there is a substantial reduction in income tax, there is no tax deduction with 80C.
Finance Minister Nirmala Sitharaman presented the budget for the coming year. The income tax has been significantly reduced in this budget. In addition, new schemes have been announced with some changes in the current income tax calculation system.
There is no income tax of up to Rs 5 lakh under the new scheme. The following taxes will then be charged.
* Income tax for earners of Rs.5 lakh to Rs.5 lakhs has been reduced to 5 percent by collecting 20 percent tax.
At present, 25% tax will be levied on the income of Rs.5 lakhs and lakhs and only 1% tax will be levied.
* The tax of 30% of the income of Rs 10 lakh to 12.5 lakh will be charged only 20%.
Currently, 5% tax will be levied on the income from Rs. 3.5 lakh to Rs. 1 lakh and only 20% tax will be levied.
Up to 30% tax will be based on existing income
Under the new scheme, no tax deduction section including 1 cc will be considered as there is no income tax exemption up to Tk 1 lakh.
Under Sections 5c and 3d, LTC will no longer be entitled to income tax deductions for housing rent deductions, entertainment allowances, professional taxes, residential loan and home loan interest.
The old plan
Where, in the next financial year, one can submit an account based on the previous income tax plan. Doing so will only be tax deductible up to two and a half lakh rupees. You will need to pay the following taxes
* Five percent tax upto Rs
20% tax on income starting from 5 lakh to 5 lakh.
* 30% tax will be levied above Rs.
An income tax payer can choose an old or new plan. Finance Minister Nirmala Sitharaman said it was in the taxpayer’s choice.