Finance minister Nirmala Sitharaman on Wednesday raised the income tax rebate limit from ₹5 lakh to ₹7 lakh in the new tax regime, while reducing the slabs to five. The new tax regime will be the default one while citizens will have the option to be in the old tax regime that operates on exemptions. After all, for people earning up to ₹15 lakh per annum, this scheme provides lower taxation. Now, an individual with an income of ₹15 lakh would pay ₹1.5 lakh or 10% of their income, a 20% reduction from the existing ₹1,87,500. The move will also reduce the compliance burden on employees to provide invoices and on the employer to verify it. So, it could well be the way things change in future.
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