Individual income tax rate structure will be revised as follows:
(a) Profits and income from employment :
– Tax free threshold on employment will be increased from Rs. 750,000 to Rs. 1.2 mn per annum. The deduction for qualifying payments will be adjusted accordingly.
– Rates applicable on the second employment will be revised as follows:
If the payment does not exceed Rs 50,000/- per month at 10%;
If the payment exceeds Rs. 50,000/- per month at 20%.
(b) The progressive rate structure will be from 4% to 24% having the equal tax slabs of Rs 600,000/- each.
Removal of exemptions on profits and income from employment
The following exemptions on profits and income from employment will be removed:
– The present exemption on providing transport.
– Certain special allowances provided for special categories of public services.
Removal of other exemptions
(i) The present exemption on certain dividends and interest or profits from investment on listed securities (corporate debt securities etc.) and other instruments will be removed.
(iii) The present exemption on interest on savings accounts up to Rs.5000/-per month will be removed.
(iv)The present exemption on interest on deposits applicable to senior citizens will be restricted to Rs. 1.5 mn per annum