ANALYSIS OF TAX IMPACT ON INDIVIDUALS (With reference to changes in income tax slab for FY 2020-21)

Abstract

Budget 2020 has proposed to introduce new tax slabs with reduced rates for those foregoing 70 tax exemptions and deductions. This new simplified tax regime is optional and will co-exist with the old one with three tax slabs and various tax exemptions and deductions available to the taxpayer.The government has already defended its tax move and said 90 per cent income tax filers in India claim tax deductions less than Rs.2lakh. At least 5.3crore people of 5.78crore claimed deductions of less than Rs.2lakh(standard deductions, PF, Home Loan interest, NPS, Life Insurance, Medical Insurance, etc.) while filing returns.