{"id":8817,"date":"2020-02-04T08:30:53","date_gmt":"2020-02-04T03:00:53","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=8817"},"modified":"2020-07-24T17:04:21","modified_gmt":"2020-07-24T11:34:21","slug":"what-are-the-major-income-tax-cuts-in-union-budget-2020","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/what-are-the-major-income-tax-cuts-in-union-budget-2020\/","title":{"rendered":"What are the Major Income Tax Cuts in Union Budget 2020?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Finance Minister,<strong> Nirmala Sitharaman<\/strong> has proposed a new income tax regime in the <strong>Union Budget 2020<\/strong> on Saturday. The declaration reveals significant income tax cuts which serve as a ray of hope for the taxpayers. <strong>Budget 2020<\/strong> enables taxpayers to either choose amid the existing income tax regime or new regime. Thus, it allows them to avail the <strong>current income tax deductions\/exemptions<\/strong> or go for the new tax regime with slashed tax rates and slabs but no tax deductions\/ exemptions. Let\u2019s get an insight of the entire story and apprehend the major income tax reliefs. <\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-background\" href=\"https:\/\/swaritadvisors.com\/income-tax-return-filing\" style=\"background-color:#01669c\">Filing Your Income Tax Return Today &#8211; Apply Now<\/a><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a620b9b7f9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a620b9b7f9\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/what-are-the-major-income-tax-cuts-in-union-budget-2020\/#Income_Tax_Cuts_in_Union_Budget_2020\" title=\"Income Tax Cuts in Union Budget 2020\">Income Tax Cuts in Union Budget 2020<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/what-are-the-major-income-tax-cuts-in-union-budget-2020\/#Impact_of_New_Income_Tax_Regime_on_the_Taxpayers\" title=\"Impact of New Income Tax Regime on the Taxpayers\">Impact of New Income Tax Regime on the Taxpayers<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_Tax_Cuts_in_Union_Budget_2020\"><\/span>Income Tax Cuts in Union Budget 2020<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Nirmala Sitharaman<\/strong> <a href=\"https:\/\/en.wikipedia.org\/wiki\/Nirmala_Sitharaman\">[1]<\/a>  has changed the income tax rates and slabs for the foregoing deductions and exemptions. The budget facilitates the middle-class to save on taxes and also discards <strong>dividend distribution tax (DDT)<\/strong> which ultimately helps to uplift the Indian economy. The new tax regime shall be beneficial as the lower tax payable for every individual shall depend upon his or her income composition and investments. <br> Here are the highlights of the <strong>income tax cuts in Union Budget 2020<\/strong>:<\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td><p><strong>Income Class <\/strong><\/p><\/td><td> <p><strong>Income Tax Rates (without deductions)<\/strong><\/p><\/td><td> <p><strong>Current Tax Rates <\/strong><strong style=\"font-family: inherit; font-size: inherit;\">(with deductions) <\/strong><span style=\"font-family: inherit; font-size: inherit; font-weight: inherit;\"> <\/span><\/p><\/td><\/tr><tr><td> <p>INR 5 Lakh<\/p><\/td><td> <p>Nil<\/p><\/td><td> <p>5%<\/p><\/td><\/tr><tr><td> <p>INR 5-7.5 Lakh<\/p><\/td><td> <p>10%<\/p><\/td><td> <p>20%<\/p><\/td><\/tr><tr><td> <p>INR 7.5- 10 Lakh<\/p><\/td><td> <p>15%<\/p><\/td><td> <p>20%<\/p><\/td><\/tr><tr><td> <p>INR 10-12.5 Lakh<\/p><\/td><td> <p>20%<\/p><\/td><td> <p>30%<\/p><\/td><\/tr><tr><td> <p>INR 12.5-15 Lakh<\/p><\/td><td> <p>25%<\/p><\/td><td> <p>30%<\/p><\/td><\/tr><tr><td> <p>Income above INR 15 Lakh<\/p><\/td><td> <p>30%<\/p><\/td><td> <p>30%<\/p><\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>There has been a <strong>tremendous change in the income tax rates<\/strong> as compared to the previous budget slabs. Some noteworthy income tax cuts include the <strong>income between INR 5 lakh to 7.5 lakh<\/strong> shall be taxed at 10% down from the last budget 20%. Likewise, the income class of <strong>INR 7.5 lakh to 10 lakh<\/strong> will bear a tax at 15% down from the current 20%. Also, the income tax rates for INR 10 lakh to 12.5 lakh will be 20% down from the earlier tax rate of 30%. The people who are earning in between the scale of <strong>INR 12.5 lakh to 15 lakh<\/strong> will be taxed at 25% down from current rates of 30%. All the companies or individuals with annual earnings of more than Rs 15 lakh will continue to be<strong> taxed at 30%<\/strong> in a financial year. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_New_Income_Tax_Regime_on_the_Taxpayers\"><\/span>Impact of New Income Tax Regime on the Taxpayers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The new <strong>income tax regime<\/strong> reduces the tax rate payable by a salaried employee; while it accompanies with some vital &#8216;conditions apply&#8217;. Finance <strong>Minister, Sitharaman<\/strong> has proclaimed that the current tax regime with its higher income tax slabs will continue to exist and the new income tax regime shall be optional.<\/p>\n\n\n\n<p>The old tax regime includes all the exemptions and rebates which a taxpayer deploys to reduce the overall tax paid. Whereas, the new tax regime under <strong>Union Budget 2020<\/strong> does not includes about 70 exemptions. It simply means that if you adopt the <strong>new income tax regime<\/strong>, then you can avail massive <strong>income tax cuts<\/strong> but cannot claim around 70 of the exemptions which were available in the previous regime.<\/p>\n\n\n\n<p>Since income tax is a valid proof of your legal income, it is essential to file an <strong><a href=\"https:\/\/swaritadvisors.com\/income-tax-return-filing\">income tax return<\/a><\/strong> every financial year. In case you need any professional assistance while <strong>filing income tax return<\/strong>, contact Swarit Advisors.<\/p>\n\n\n\n<p class=\"text-left\"><b>Also, Read<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/union-budget-2020-21-key-highlights\/\">Union Budget 2020-21: Key Highlights<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Finance Minister, Nirmala Sitharaman has proposed a new income tax regime in the Union Budget 2020 on Saturday. The declaration reveals significant income tax cuts which serve as a ray of hope for the taxpayers. Budget 2020 enables taxpayers to either choose amid the existing income tax regime or new regime. Thus, it allows them [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":8818,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[416],"tags":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/8817"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=8817"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/8817\/revisions"}],"predecessor-version":[{"id":11865,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/8817\/revisions\/11865"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/8818"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=8817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=8817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=8817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}