New Delhi: Bringing cheer to thousands of middle-class taxpayers, finance minister Nirmala Sitharaman announced new, a much lower tax rate slabs for the upcoming fiscal year 2020-2021. (Full Coverage) Also Read - Union Budget 2020: Government Introduces Five Tax Slabs With Lower Rates For Those Foregoing Exemptions

A look at the new tax rates: Also Read - Union Budget 2020: Online Degree Courses by Top 100 Educational Institutions to Students From Weaker Sections, Says Sitharaman

For incomes of up to Rs 5 lakh per year, there will be no income tax. Previously, it was 5 % Also Read - Major Tax Relief For Middle Class: Union Budget 2020 Reduces Income Tax Rates

For incomes between Rs 5 lakh and Rs 7.5 lakh per year, the income tax to be paid will be 10 per cent of the income. Previously, it was 20 per cent

For incomes between Rs 7.5 lakh and Rs 10 lakh per year, the income tax to be paid will be 15 per cent. Earlier, it was 20 per cent

For incomes between Rs 10 lakh and Rs 12.5 lakh per year, the income tax to be paid will be 20 per cent. It was 30 per cent earlier

For incomes between Rs 12.5 lakh and Rs 15 lakh per year, the income tax to be paid will be 25 per cent. Earlier it was 30 per cent.

For incomes above Rs 15 lakh per year, the income tax to be paid will be 30 per cent. There has been no change.

But why is this optional? The taxpayers will be given the choice to either remain in the old regime or opt for the new reduced tax rate.

Why will anyone pay higher income tax? To avail exemptions and deductions.

A person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now