Finance Minister Nirmala Sitharaman gave a big gift to the middle class on 1 February. He announced a change in income tax rules. With this, there will be no tax on income up to Rs 12 lakh annually. It is believed that crores of taxpayers will benefit from this. However, it is important to understand that this advantage is only for taxpayers of the new regimen of income tax.
Finance Minister Nirmala Sitharaman said that now tax will be taxed on income up to Rs 12 lakh annually. This will benefit a large number of taxpayers. He said that the government will introduce a new income tax bill next week. It will have to make tax rules easier for middle class.
The Finance Minister said on 1 February that the government is going to change the slab of income tax for the benefit of middle class. The aim of this is that people who have low income, will have to pay less tax. People who have more income will have to pay more tax. This change will provide tax benefit of up to Rs 1.1 lakh on income up to Rs 25 lakh annually.
Taxpayers need to understand that the Finance Minister has not zero the tax rate on income up to Rs 12 lakh annually. The rate of tax on income up to Rs 12 lakh annually will be zero when the special rebate will benefit. Earlier, the government has been giving the benefit of special rebate on income up to Rs 7 lakh annually in the new regimen. It is found under section 87A.