arshyam wrote:New slabs announced, current rates in brackets:
0% for up to ₹5 lakh, no tax.
10% for ₹5-7.5 lakh (20%)
15% for ₹7.5 lakh-10lakh (20%)
20% for ₹10-12.5 lakh (30%)
25% for 12.5 lakh-15 lakh (30%)
30% for ₹15 lakh+ (30%)[/b]
₹78000 reduction for someone who earns ₹15 lakhs under the new regime, even after excluding section 80C deductions.
"Even after excluding section 80C" is cleverly worded. What about 2l deduction on housing loan interest, plus medical insurance etc which also needs to be given up.
There is a marginal improvement perhaps for younger people with lower incomes and no investments in tax saving ELSS/SIP, no housing loan and no personal mediclaim etc.
For typical family people who have a housing loan, avail of insurance and invest in retirement funds they straight away need to forego 3.75 lakh worth of deductions just to avail of the marginally lower slabs so its not going to give any savings.
Bottom line is that people need to assess their own income come and investment/outflow structure and decide if there are any benefits to them. Also, despite the claims of simplifying direct tax, it makes tax structure more complex rather than simplifying it, unless you look at those who give up exemptions in isolation, and are probably a minority among middle class.