Currently, personal income is taxed at 5 percent for income between Rs 2.5 to Rs 5 lakh, at 20 percent for income between Rs 5 lakh and Rs 10 lakh, and 30 percent for an income of over Rs 10 lakh.
The government panel on Direct Tax Code has proposed radical revisions to the personal income tax rates and slabs. It has suggested zero tax levy on annual income between Rs 0-2.5 lakh, 10 percent on income between Rs 5 -10 lakh, and 20 percent on income of Rs 10 to 20 lakh.
Annual income above Rs 20 lakh and up to Rs 2 crore is proposed to be taxed at 30 percent, sources told Network18.
In related news, IANS reported that a Direct Tax Code Task Force, led by CBDT member Akilesh Ranjan, proposed five tax slabs instead of the current three. It suggests tax slabs of five percent, 10 percent, 20 percent, 30 percent and 35 percent.
Those earning an annual income between Rs 5 lakh and Rs 10 lakh will be charged 10 percent tax. For those in the Rs 10-20 lakh bracket, it recommends 20 percent; from Rs 20 lakh to Rs 2 crore: 30 percent; and from Rs 2 crore and above: 35 percent.
Currently, personal income is taxed at 5 percent for income between Rs 2.5 to Rs 5 lakh, at 20 percent for income between Rs 5 lakh and Rs 10 lakh, and 30 percent for an income of over Rs 10 lakh.As announced in the interim budget of 2019, there will be a rebate on taxes paid on annual income up to Rs 5 lakh. This effectively means an annual income of up to Rs 5 lakh will attract zero tax.The Great Diwali Discount!
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