Finance minister Nirmala Sitharaman on 1st February (Saturday), 2020 presented the Union Finance Budget 2020-21 in the parliament. The ministry of finance declared a simplified income tax structure for taxpayers in India. The government has excluded more than 70 exemptions and deductions from over 100 exemptions and deductions proposed in the old income tax structure. Union Budget 2020 provides individual an option to select between the new tax regime or old tax regime to pay taxes.

Here are the old income tax slab Vs new income tax regime proposed in Union Budget 2020:

Taxable Income (per annum)New tax slabs (%)
Up to Rs 2,50,000NIL
Rs 2,50,001 to 5,00,0005%
Rs 5,00,001 to 10,00,000Rs. 12,500 + 20% of total income exceeding Rs 5,00,000
Above Rs 10,00,000Rs 1,12,500 + 30% of total income exceeding Rs 10,00,000

Below are the main tax benefit concessions that taxpayers will have to forgo under new income tax regime 2020:

Additional deduction on Home Loan interest on affordable houses u/s 80EEA – Up to Rs 1.5 lakh

Deduction on Auto Loan interest for purchase of electric vehicle u/s 80EEB – Up to Rs 1.5 lakh

Tax rebate u/s 87A – Up to Rs 12,500 on taxable income up to Rs 5 lakh

Exemption u/s 80D – Up to Rs 25,000 (For senior citizens Rs 50,000)

Deduction on Home Loan interest – Up to Rs 2 lakh

Exemption u/s 80C – Up to Rs 1.5 lakh

 Here’s a list of tax exemptions that will continue to benefit taxpayers under new income tax structure 2020:

 Section 80TTA: Deduction on savings bank interest up to Rs. 10k

Section 80CCD(2): Employer’s contribution to NPS

Sources: Moneycontrol.com, India Today

 

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