Finance Minister Nirmala Sitharaman announced a slew of reforms a year ago including corporate tax rate cuts and an injection of funds into a nationwide infrastructure project.
It is expected that the new budget will offer income tax incentives and allocate more funds to increase state spending on infrastructure in an attempt to revive economic growth, which hit a decade-low previous year. For income between Rs 7.5 lakh and Rs 10 lakhs, the tax rate will now be 15% against the current 20%.
Individuals earning Rs 7.5 lakh and foregoing exemption of Rs 1.5 lakh under Section 80C will have to pay Rs 5,200 more under the new tax regime, in comparison to when they were not availing this exemption.
Nirmala Sitharaman said Rs 1.7 lakh crore has been provided for transport infrastructure in 2020-21. For income between Rs 10 lakh and Rs 12.5 lakh, the new tax rate will be 20%, down from 30% now.
The Finance Minister said that this move would make it easier for people to comply with the tax laws, and make it easier for them to file their returns by themselves, without the help of accountants. The Press Trust of India news agency said the minister cut short her speech in Parliament because she felt unwell after speaking for more than two hours, the longest budget speech by an Indian finance minister.
India's government on Saturday offered relief to taxpayers and vowed to spend billions to double farmers' incomes and upgrade infrastructure, health care and industry to boost the country's lowest economic growth in a decade. Though there have been some benefits and sops that have been given in the last few years, income tax slabs have not seen any major changes since 2014, when Prime Minister Narendra Modi's government presented its first Union budget.