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Data | Budget 2020: Income and tax scenarios for salaried individuals

The Income Tax Act has, since 1989, provided for up to three times penalty on escaped tax.

The Income Tax Act has, since 1989, provided for up to three times penalty on escaped tax.   | Photo Credit: Getty Images/iStockphoto

Finance Minister Nirmala Sitharaman on Saturday proposed a personal income tax regime with reduced rates for those earning up to Rs. 15 lakh.

The tax rate for those earning between ₹5 lakh and ₹7.5 lakh has been lowered from 20% to 10%, and for incomes between ₹7.5 lakh and ₹10 lakh to 15% from 20%. Similarly, tax rates have been lowered from 30% to 20% for those earning between ₹10 lakh and ₹12.5 lakh, and to 25% for those with incomes from ₹12.5 lakh to ₹15 lakh.

However, tax payers can opt for new rates only if they give up almost all tax exemptions and deductions they enjoy under the current regime.

Also read: Lowest GDP since 1976 to widening fiscal deficit: Capturing Indian economy in 9 charts

The graphic looks at various scenarios of taxable income for salaried individuals and calculates the total tax payable before the proposals in Budget 2020-21 and after applying them. This is based on Ernst and Young calculations.

To try out various scenarios, download google sheet at https://bit.ly/2uTzPEi

Income tax slabs

image/svg+xml Particulars Individual -Taxable income < Rs.10 lakh ...Rs. 10 to Rs. 15 Lakhs ...Rs. 15 to Rs. 50 Lakhs Pre Budget Post Budget Pre Budget Post Budget Pre Budget Post Budget Income from Salary Basic Salary 450000 450000 850000 850000 1150000 1150000 HRA 180000 180000 150000 150000 500000 500000 LTA 75000 75000 75000 75000 150000 150000 Special Allowance 80000 80000 500000 500000 700000 700000 NPS contrib. by employer 45000 45000 85000 85000 115000 115000 Total income 830000 830000 1660000 1660000 2615000 2615000 HRA - - -80000 - -305000 - LTA - - -75000 - -75000 - Less: Standard deduction -50000 - -50000 - -50000 - Less: Professional tax -2400 777600 - 830000 -2400 1452600 - 1660000 -2400 2182600 - 2615000 House Property income - -200000 - -200000 - SB a/c Interest 10000 10000 30000 30000 50000 50000 FD interest 40000 50000 40000 50000 15000 45000 15000 45000 25000 75000 25000 75000 Gross Total income 827600 880000 1297600 1705000 2057600 2690000 Section 80C -54000 -150000 - -150000 - EPF 54000 - 102000 - 138000 - PPF - - 50000 - 50000 - Section 80CCD -45000 -45000 -135000 -85000 -165000 -115000 NPS- addnl contribution - 100000 - 100000 - NPS- Employer contrib. 45000 45000 85000 85000 115000 115000 Medical Insurance Premium - - - - -18000 - -18000 - Interest from savings bank - -10000 - - -10000 - -10000 - Pre Tax Income 718600 835000 9,84,600 1620000 1714600 2575000 Income-tax 56220 50250 109420 223500 326880 510000 Less: Rebate Sec. 87A - - - - - - Tax after Rebate 56220 50250 109420 223500 326880 510000 Tax payable after surcharge 56220 50250 109420 223500 326880 510000 Health & Edu Cess @ 4% 2249 2010 4377 8940 13075 20400 Total tax 58470 52260 113800 232440 339960 530400
 

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Printable version | Mar 30, 2020 8:12:40 PM | https://www.thehindu.com/data/data-budget-2020-income-and-tax-scenarios-for-salaried-individuals/article30720562.ece

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