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)

A look at the new tax rates:

For incomes of up to Rs 5 lakh per year, there will be no income tax. Previously, it was 5 %

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