If you are confused about the changes in the tax slab after the budget announcement by the Finance Minister, then let us solve your problem in simple words. First of all, let us tell you that if your annual income is up to Rs 7 lakh, then no income tax will have to be paid. Tax expert Balwant Jain told India TV that the government has made income up to Rs 7 lakh tax free. However, for this it will be necessary to file ITR. It will not be necessary to file ITR for those earning only up to Rs 3 lakh. This limit of income will be applicable equally in both old and new tax regime. Yes, if your income exceeds Rs.700,001, then you will have to pay income tax according to the tax regime you follow.

According to the income, tax will have to be paid in this way

Balwant Jain explains that if your annual income is 7.5 lakhs and you adopt the new tax regime, then you will get income tax free of three lakhs. Apart from this, tax will have to be paid at the rate of 5 per cent on Rs 4.5 lakh. This is because in the new tax regime, income of 3-6 lakhs has been taxed at the rate of 5%. Thus, you will have to pay tax of Rs 22,500. Similarly, if your income is more then you can calculate the tax.

Till now the income of 5 lakhs was tax free

Till now there was exemption from income tax on annual income of Rs 5 lakh. In the new or old tax regime, annual income up to 2.5 lakh was tax free. At the same time, the income of the remaining 2.5 lakhs was exempted under Section 87A of the Income Tax Act, 1961. Finance Minister Piyush Goyal on 1 February 2019 increased the exemption limit to Rs 12,500 under section 87A of the Income Tax Act 1961. This is for those whose income is up to Rs 5 lakh. In this way, income of Rs 5 lakh used to be tax free. Now the government has increased it to Rs 7 lakh. That is, those whose income will be up to Rs 7 lakh, they will not have to pay any income tax. At the same time, tax will have to be paid on income more than this.

New tax regime will now come by default

According to the information received in the budget, the new tax regime has been made by default. Tax expert Balwant Jain told India TV that till now the new tax regime has been done by default. That is, if you do not pay attention while filing the return, then you will get the option of New Tax Regime first. If you want to have the old tax system, then you have to choose from that. Jain told that now people will need to be careful while filing returns. Otherwise, they will make mistakes.

Preparing to end the old tax system

Tax experts say that the government plans to phase out the old tax system gradually. For this, the new tax regime is being made attractive. Maybe in the next year or two, the old tax system will be completely scrapped. After that only the new tax regime will be left with the taxpayers.