Finance Minister Nirmala in an exclusive conversation with Republic Media Network's Editor-in-Chief Arnab Goswami elaborated on how the presented Budget 2020 is 'opening up choices' and letting individuals 'pay less taxes.' Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals and abolished dividend distribution tax for companies.
Elaborating on reforms in Income Tax Rates announced in the Union Budget, Sitharaman said, "We are opening up the choices for an individual that he can do anything with the money that he has saved by paying less tax. I am giving the money back to him. Oil marketing companies are free to do their pricing. The marketing companies are free to do what they want."
Finance Minister Nirmala Sitharaman on Saturday announced cuts in personal income tax, extended tax benefits for affordable housing and gave relief to companies on payment of dividend in the Union Budget for 2020-21 as the government looked to boost consumption to bring the economy out of the worst slowdown in 11 years The Finance Minister proposed raising customs duty on a variety of products ranging from tableware and kitchenware, electrical appliances to footwear, furniture, stationery and toys to give a level playing field to domestic companies and boost Make in India.
Offering an optional lower rate of income tax to individuals, Sitharaman in her Budget for 2020-21 proposed new tax slabs of 15% and 25% in addition to the existing 10%, 20% and 30%. The new I-T slabs would be for individuals not availing certain specified deductions or exemptions. Under the proposed I-T slab, annual income upto Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5% tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while those between Rs 7.5 and 10 lakh at 15 per cent
Those earning between Rs 10 and 12.5 lakh will pay tax at the rate of 20%, while those between Rs 12.5 and Rs 15 lakh will pay at the rate of 25%. Income above Rs 15 lakh will be taxed at 30%. Individuals opting for taxation under new rates will not be entitled to exemption/deductions including under Section 80C and 80D, LTC, housing rent allowance, deduction for entertainment allowance, professional tax, and interest on self occupied/vacant property. Currently, annual income upto Rs 2.5 lakh is exempt from I-T. While a 5% tax is charged for income between Rs 2.5 and 5 lakh. 20% for income between Rs 5 lakh and Rs 10 lakh and 30 per cent for those earning above Rs 10 lakh.
In another significant change, an NRI who is not taxed in the foreign country will be taxed in India. Revenue Secretary said that some people stay in different countries for a certain number of days but are not residents of any of those.
(With PTI inputs)