Income Tax Rebate Limit Raised To ₹ 7 Lakh In New Regime, Up From ₹ 5 Lakh

 Income Tax Rebate Limit Raised To ₹ 7 Lakh In New Regime, Up From ₹ 5 Lakh

Earlier, taxable income — calculated after all usual exemptions — up to ₹ 2.5 lakh attracted zero tax. Now that goes up to ₹ 3 lakh. 

She gave an example: "An individual with an annual income of ₹ 9 lakh will be required to pay only ₹ 45,000." This was ₹ 60,000 under the calculations applicable up to this financial year.

She also extended the benefit of Standard Deduction while calculating taxable income of the salaried class and pensioners, including family pensioners: "Each salaried person with an income of ₹ 15.5 lakh or more will thus stand to benefit by ₹ 52,500."

She also brought down the highest applicable tax rate in India — from 42.74 per cent to 39. This was her fourth announcement on personal income tax. 

"Lastly, the limit of ₹ 3 lakh for tax exemption on leave encashment on retirement of non-government salaried employees was last fixed in the year 2002, when the highest basic pay in the government was ₹ 30,000 per month. In line with the increase in government salaries, I am proposing to increase this limit to ₹ 25 lakh," she said.