During his Budget speech, the Finance Minister, Arun Jaitley, proposed revised tax limits.
He announced that income tax rate on those earning between Rs. 2.5 lakh and 5 lakh will be cut by half. They will now be taxed at 5% instead of the current 10%.
Furthermore, there will be a surcharge of 10% for the individuals whose income is between Rs. 50 lakh and Rs. 1 crore.
Mr. Jaitley has opined that this will drive investment and growth.
- Tax liability for those with annual income between Rs. 2.5 and 5 lakh at 5% instead of the existing 10%.
- Surcharge of 10% for those individuals whose annual income is between Rs. 50 lakh and Rs 1 crore.
- Tax rebate for the slab Rs 2.5-5 Lakh has been reduced to Rs 2500, from Rs 5000.
- All other income groups will get a uniform benefit of Rs 12,500.
- Surcharge on the individual annual income of Rs 1 crore or more remains unchanged at 15%.
- Corporate tax cut for Ministry of Micro, Small and Medium Enterprises (MSMEs), no cash transactions above Rs. 3 lakh.
- MSMEs with annual turnover upto Rs. 50 crore will have to pay only 25% tax.