The new budget is a big relief for the middle class. Finance Minister Nirmala Sitharaman announced a five income tax measure.

According to the new budget people who are earning upto Rs 7 lakh annually will not pay any income tax in the new tax regime as the personal income tax rebate limit has been increased to Rs 7 lakh from 5 lakh.

The new income tax slabs are as follows :

0-3 lakh: Nil

Rs 3 lakh to 6 lakh: 5%

Rs 6 lakh to 9 lakh: 10%

Rs 9 lakh to 12 lakh: 15%

Rs 12 lakh to 15 lakh: 20%

Above Rs 15 lakh: 30%

The Citzens will have the option to be in the old tax regime as well, although the  new income tax regime will be the default tax regime, the finance minister announced.

So citizens can choose accordingly. The average processing time of refund is also reduced from 93 days to 16 days.

Old tax regime allows PPF, NPS and some other concessions. So people above the 7 lakh annual income will have to judiciously choose between the new and old regimes. The benefits of the standard deduction has been introduced to the new regime.

So an individual with income of Rs 9 lakh annually will pay Rs 45,000 tax which is 5% of their salary, that means a reduction if Rs 15,000 from present Rs 60, 000.

The highest income surcharge is also reduced from 37% to 25%.

Source: HindustanTimes and Times of India