The budget simply welcomed a series of thumbs up and relatively higher criticisms. It's high time you understand the new tax regime and what it has in store for you. Now just picture the Avengers in a different scenario. In the climax, the powerful infinity stones are held by Thanos.
Whoever has it will possess the power with which they can control the entire universe. After a series of twists and turns, Iron man gets hold of the infinity stones. But let's say, rather than simply beheading Thanos and restoring the world, he placed two options for Thanos to choose. Similarly, holding the infinity stones of India in hand, the Government has come up with two bonanza options, proving wrong most of our expectations.
With an intention to revive the economic slowdown and to hit the 5 trillion target, the Finance minister announced budget. The new budget introduced a list of adjustments to the tax regime. The new and old tax rates are as follows,
INCOME | NEW % | OLD % |
Up to RS.2.5 lakhs | No tax | No tax |
RS. 2.5 – RS. 5 lakhs |
5 | 5 |
RS. 5 – RS7.5 lakhs |
10 |
20 |
RS 7.5 – 10 lakhs |
15 |
20 |
RS.10 – RS 12.5 lakhs |
20 |
30 |
RS. 12.5 – RS 15 lakhs |
25 |
30 |
Above Rs 15 lakhs |
25 |
30 |
Yes, the new budget has lowered the tax rates. However, whether you make the switch or not totally depends upon you.
If you are opting to switch, then you should bid farewell to all the exemptions which you received under the old regime. Basically, the Government intends to scrap off the exemptions in the long run. So the new tax regime does not provide any exemptions such as section 80C, 80D, etc. which was earlier provided under the income tax act 1961. Taxpayers who have now switched to the new regime can make it back to the old one in the next financial year. In short, you are provided with the option to choose between the two options every year.
Those who have a home loan to pay might opt to stick to the old one. On the other hand, those who wish to face less paperwork might make a quick swap to the new one. So the answer to it depends on individual needs and requirements.
Now let me quickly brief you through the pros and cons of the new budget in comparison with the old one. I hope that it will help you make your decision and choose between the tax regimes.
Weigh the various advantages and disadvantages you receive under both the tax slabs and make the shift accordingly.
Budgets happen to be a significant piece of the jigsaw puzzle. But with the economy facing one of its most crucial time, whether the budget will turn to be a historical one or not is something that could be answered only in the long run.