Union Finance Minister Nirmala Sitharaman on Wednesday announced an increase in income tax rebate limit to Rs 7 lakh from Rs 5 lakh in the new tax regime.
FM Nirmala Sitharaman also proposed to change the structure of the personal income tax regime by reducing the number of slabs and increasing the tax exemption limit from Rs 2.5 lakh to Rs 3 lakh.
🔴 Basic Income Tax Exemption limit hiked from Rs 2.5 lakh to Rs 3 lakh.
🔴 Rebate under Section 87A hiked from Rs 5 lakh to Rs 7 lakh
🔴 New Income Tax Slabs:
👉 Rs 0 to Rs 3 lakh – 0% tax
👉 Rs 3 to 6 lakh – 5% tax
👉 Rs 6 to 9 lakh – 10% tax
👉 Rs 9 lakh to Rs 12 lakh – 15% tax
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👉 Rs 12 lakh to Rs 15 lakh – 20% tax
👉 Above Rs 15 lakh – 30% tax
Steps to get Rebate under Section 87A:
👉 Calculate your gross income for the FY
👉 Calculate your tax deductions for tax savings, investments, etc.
👉 Arrive at the total income after reducing the tax deductions.
👉 Declare your gross income and tax deductions in ITR.
👉 Claim a tax rebate under section 87A if your total income does not exceed Rs 7 lakh.
👉 If everything comes under Rs 7 lakh, your income tax will be NIL.
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