In her second Budget, Finance Minister Nirmala Sitharaman has proposed a new income tax regime with lower income tax slab rates and fewer deductions, which will be available along with the old income tax regime and a taxpayer would be free to choose if he/she wants to continue in the old regime or shift to the new one.
Unlike the 4 slabs in the old regime – 0 per cent on income up to Rs 2.5 lakh, 5 per cent on income over Rs 2.5 lakh to Rs 5 lakh, 20 per cent on income over Rs 5 lakh to Rs 10 lakh and 30 per cent on income over Rs 10 lakh, the new regime has 7 slabs – 0 per cent on income up to Rs 2.5 lakh, 5 per cent on income over Rs 2.5 lakh to Rs 5 lakh, 10 per cent on income over Rs 5 lakh to Rs 7.5 lakh, 15 per cent on income over Rs 7.5 lakh to Rs 10 lakh, 20 per cent on income over Rs 10 lakh to Rs 12.5 lakh, 25 per cent on income over Rs 12.5 lakh to Rs 15 lakh and 30 per cent on income over Rs 15 lakh.
