New Delhi: Union Finance Minister Nirmala Sitharaman’s maiden Union Budget has made no change to the income-tax slabs. There is, however, an increase in surcharge paid by those earning more than Rs 2 crore in a year. (Catch Minister’s Speech LIVE Updates Here) Also Read - Centre Working on Fresh Economic Package to Address 2nd Wave of Coronavirus: Report
The Minister said that there would be an effective income tax increase of 3% for those earning Rs 2-5 crore per annum. Also Read - No Interest Cut on Small Savings Schemes: Finance Ministry Withdraws Orders 'Issued by Oversight'
Earlier, in a major relief to taxpayers, acting Finance Minister Piyush Goyal had, in the Interim Budget, proposed to double the tax exemption threshold for individual annual incomes from the current Rs 2.5 lakh to Rs 5 lakh. Individuals with yearly income within the proposed limit will not have to pay any income tax for the next fiscal. Also Read - Govt Slashes Rates on Small Savings Schemes by up to 1.1 Per Cent, PPF Hits 46-Year Low of 6.4 Per Cent
“Individual taxpayers having taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax.
“As a result, even persons having gross income up to Rs 6.50 lakh may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance, among others,” he had said.
So as of now, for a salary of up to Rs 2.5 lakh per annum, there zero income tax. For an annual salary between Rs 2.5 lakh and Rs 5 lakh, there is an income tax of 5% + 4% cess. For salary between Rs 5 lakh and Rs 10 lakh per annum, the tax is of 20% with 4% cess and for a salary between Rs 10 lakh and above, the tax is Rs 1.125 lakh + 30% + 4% cess.