Here’s the insight of what interim budget 2020-21 has in store for you.
- To simplify the tax system and lower tax rates, about 70 out of the more than 100 Income-tax deductions and exemptions have been removed.
- Dividend Distribution Tax (DDT) is abolished. Companies will not be required to pay DDT. Dividends to be taxed only in the hands of recipients, at applicable rates.
- New optional tax slabs: New Income-tax slabs introduced by budget 2020.
|Up to Rs 5 lakh
|Rs 5 Lakh to Rs 7.5 Lakh
|Rs 7.5 lakh to Rs 10 lakh
|Rs 10 lakh to Rs 12.5 lakh
|Rs 12.5 lakh to Rs 15 lakh
|Rs 15 lakh and above
- To avail the benefit of a reduced tax slab rate, an individual has to forego following tax exemptions.
- Exemption u/s 16 (Standard deduction of Rs.50,000/-, Professional Tax, and Entertainment Allowance).
- Interest on House loan.
- Deduction under chapter VIA (except Section 80CCD(2) on account of the employer's contribution).
- Deduction of Rs 15000 allowed from family pension u/s 57(iia).
- House Rent Allowance u/s 10(13A).
- Leave Travel Allowance u/s 10(5).
- Deduction of Rs.1500 on clubbing of Income.