New Income Tax Regime Comes Into Effect From Today, Here're Details

Amid the lockdown imposed in the country due to the coronavirus pandemic, the country enters into a new financial year, 2019-2020, starting April 1. The Modi government in a press release dated March 30 clarified that it was not extending the financial year even as the country battles the spread of COVID-19. However, the government extended the deadline for filing income tax returns for the financial year 2018-19 and also deferred the dates for linking Aadhaar with PAN by three months to June 30, 2020.

In the new financial year, 2019-20, the new tax slabs will come into effect while the old ones will also remain in discourse. The taxpayer will have the option to choose between the two.

Under the new tax slab announced by Finance Minister Nirmala Sitharaman in her last year’s budget speech, those having a monthly income up to Rs 2.5 won’t need to pay any tax.

Also Read: Last Date For Filing ITR For FY18-19, Aadhaar-PAN Linking Extended To June 30 Amid Coronavirus Crisis: Nirmala Sitharaman

People having income between Rs 2.5 lakh To Rs 5 lakh, will pay 5 percent tax, the ones in the income slab between Rs 5 lakh to Rs 7.5 lakh will pay 10 percent and the earners having income between Rs 7.5 lakh to Rs 10 lakh will be required to pay 15 percent tax.

Individuals having income between Rs 10 lakh to Rs 12.5 lakh need to pay 20 percent tax. Those having income between Rs 12.5 lakh to Rs 15 lakh will pay 25 percent while the ones with income of more than 15 lakh annually will be liable for 30 percent income tax.

Moreover, the individuals who will opt for taxation under new rates will not be entitled to exemption/deductions which are under Section 80C and 80D. The exemptions that would not be available for those opting for new tax rules are- LTC, housing rent allowance, deduction for entertainment allowance, professional tax, and interest on self-occupied/vacant property.

(With PTI inputs)