Finance Minister Nirmala Sitharaman has said that it is the clear thinking of the Modi government to empower the people along with improving their lives by fulfilling their basic needs.
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Finance Minister Nirmala Sitharaman has said that it is the clear thinking of the Modi government to empower the people along with improving their lives by fulfilling their basic needs. Sitharaman said at a book release function that there is a clear perception about ‘what is empowerment’ versus ‘what is entitlement’ in this government. He said that if you are thinking of empowering people, then there is no need for entitlement. If you provide for their basic needs, people find their way to make their lives better.
Finance Minister explained the benefits of previous steps
The Finance Minister further said that in order to ensure low rates for the people of low income group, the government has brought an alternative income tax system with seven tax slabs. He said that along with the old tax system, the government has come up with an alternative system, in which there is no exemption, but it is simple and its tax rates are also low. He said that in the old tax regime, every taxpayer can claim about 7-10 per cent exemption and depending on the income limit, the income tax rates ranged between 10, 20 and 30 per cent.
Sitharaman said that she had to make seven slabs so that there were lower rates for the people of low income group. The Alternative Income Tax regime was introduced in the General Budget 2020-21, wherein individuals and Hindu Unified Families (HUFs) were taxed with lower rates. However, other tax exemptions like rent allowance, home loan interest and investment under 80C are not given in this arrangement.
What are the income tax rates?
Under this, the total income up to Rs 2.5 lakh is tax free. After this, five per cent on total income from Rs 2.5 lakh to Rs five lakh, 10 per cent on total income from Rs five lakh to Rs 7.5 lakh, 15 per cent on income from Rs 7.5 lakh to Rs 10 lakh, from Rs 10 lakh Income up to Rs 12.5 lakh is taxed at 20 per cent, income from Rs 12.5 lakh to Rs 15 lakh is taxed at 25 per cent and income above Rs 15 lakh is taxed at 30 per cent.
Even under the old tax regime, income up to Rs 2.5 lakh is tax free. After this, income between Rs 2.5 lakh and Rs 5 lakh is taxed at 5 per cent, while between Rs 5 lakh and Rs 10 lakh, 20 per cent tax is levied. After this, income above Rs 10 lakh is taxed at 30 per cent. Sitharaman said that the benefits of the old tax system have not been removed, rather the new exemption-free tax system is an alternative form of the income tax return system. He said that to end the harassment, the tax department has made arrangements for faceless assessment of income tax returns.
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