Budget 2020 slashes income tax rates for Rs 5 lakh-15 lakh bracket; revised rates here

As widely expected, Union Finance Minister Nirmala Sitharaman on Saturday proposed to slash income tax........... in Budget 2020. 

The personal income tax rate cut will increase consumption, which in 2019 has been one of the slowest in a decade. This could give rise to the demand for cars and homes, providing a much-needed fillip to companies in the FMCG and electronics sectors. More disposable income in the hands of individuals and more investible surplus in the hands of corporates could only come if the Centre reduces income tax, say experts.

Till now, the base tax rate for annual income between Rs 2.50 lakh to Rs 5 lakh is 5 per cent, which increases to 20 per cent for income above Rs 5 lakh up to Rs 10 lakh. Income above Rs 10 lakh is taxed at 30 per cent, plus there is an additional surcharge on individuals whose income is Rs 2 crore or more.

The additional surcharge announced in the Budget in last July led to the maximum tax rising to Rs 42.744 per cent. There is a hope that the surcharge would be subsumed in the overall tax rate and the maximum rate may be lowered to 35 per cent. There is an expectation that the tax slabs will be recast too.