New income tax slabs: How Sitharaman’s Budget announcement impacts your pocket

Finance Minister Nirmala Sitharaman announced new personal income tax rates in her Budget speech on Saturday.

“People earning till Rs 5 lakh need not pay any income tax. For those who have an income between Rs 5 lakh and Rs 7.5 lakh, will now pay 10 per cent tax; those earning between Rs 7.5 lakh and Rs 10 lakh will pay an income tax of 15 per cent. For income between Rs 10 to Rs 12.5 lakh, the new tax rate is 20 per cent and for income between Rs 12.5 lakh and Rs 15 lakh, the revised tax rate will be 25 per cent,” said the Finance Minister.

“There is no change for those earning above Rs 15 lakh per annum. They will be taxed at 30 per cent,” Sitharaman added.

With this announcement, Sitharaman introduced new income tax slabs - of income upto Rs 7.5 lakh per annum and 12.5 lakh per annum. The new rates will come into effect from April 1, 2020, when the new financial year kicks in.