• Individuals who are under the new tax regime will benefit as the number of slabs has come down to 5. The income threshold for taxation under the new tax regime has been increased to Rs 3 lakh from Rs 2.5 lakh earlier.
• A resident individual with total income up to Rs 7 lakh will no longer have to pay tax after proposed increase in rebate
• Standard deduction of Rs 50,000 is now available for individuals under old tax regime. It has now been extended to the new tax regime.
• Family pension exemption of Rs 15,000 was earlier available under old tax regime. It has now been expanded to new tax regime
• High income individuals with income above Rs 2 crore pays a surcharge of 37 per cent. This has now been reduced to 25 per cent. It would lower the maximum tax rate from 42.7 per cent to about 39 per cent.
• Leave encashment of upto 10 months of average salary at the time of retirement for private sector employees is exempt upto Rs 3 lakh. This will be extended to Rs 25 lakh.
• There is no change in exemption limits under section 80C and it remains at Rs 1.5 lakh.
• A person not having income from business or profession can exercise the option to of out of a tax regime every year. But for persons with income from business or profession can exercise the option only once.
• Insurance policies excluding ULIP where the aggregate premium is over Rs 5 lakh, maturity amount will not be exempt from tax. This will not impact the tax provided to the amount received on the death of the insured person.