* Individual taxpayers having annual taxable income up to INR 500,000 get a full tax rebate and are not required to pay income tax. Please note that if taxable income exceeds INR 500,000 the rebate does not apply and hence individuals have to pay income tax on their full taxable income.
** As the new tax regime will be optional for taxpayers, an individual who is currently using deductions/exemptions under the Income Tax Act may choose to forgo them and pay tax per the new regime. Some of the common deductions that would be lost in this case include (but are not limited to) – House rent allowance, Leave travel allowance, Standard deductions, Interest on property, Investment related deductions under 80C, 80D, 80DD etc.
Note - surcharge and cess will continue to apply at existing rates, depending on the level of individual's income.
Overall a set of proposals which will ease somewhat the burden on businesses, encourage inward investment and encourage this to be done through subsidiary companies rather than LLPs.
Once these proposals are passed by the Parliament, these changes will become effective for the year commencing 1st April 2020 and ending 31st March 2021.