Finance Minister Nirmala Sitharaman announced a new tax regime for individual tax-payers. As per the new regime, there will be five slabs in place of the previous four.
The first slab will be for those in the ₹5-7.50 lakh bracket. They will pay a tax of 10%. Those in ₹7.5-10 lakh will be taxed at 15%; those in the ₹10-12.5 lakh at 20%; those in the 12.5 to 15 lakh at 25 per cent. Those earning above ₹15 lakh will be taxed at the old 30 per cent.
She said the tax system will be further simplified and the exceptions and reductions would be rationalised soon.
The FM said the government would sustain a ₹48,000-crore revenue loss due to income tax relief, adding that the new income tax rates will be optional.
Income tax rates will be significantly reduced for those who forego reliefs, exemptions.