On 1 February 2020, the Finance Minister presented the Union Budget 2020 before Parliament. The key amendments introduced in the Finance Bill 2020 regarding personal tax are summarized below.
To provide significant relief to individual taxpayers and to simplify income tax law, a new simplified personal income tax regime has been introduced.
The proposed tax structure under the new regime is as follows:
|Taxable income (INR)||New tax rate|
|up to 250,000||exempt|
|250,001 – 500,000||5%|
|500,001 – 750,000||10%|
|750,001 – 1,000,000||15%|
|1,000,001 – 1,250,000||20%|
|1,250,001 – 1,500,000||25%|
The new regime is optional. However, taxpayers will have to forego certain deductions and exemptions.