Finance Minister Nirmal Sitharaman has announced a new tax slab in the recently presented Union Budget. The new tax regime is said to be beneficial for the salaried individuals as well as pensioners. The National Pension Scheme has also undergone minor changes in this Union Budget.
FM Nirmala Sitharaman announced changes to the new tax regime slabs and an increase in the standard tax deduction from ₹50,000 to ₹75,000. However, the deduction will remain unchanged at ₹50,000 as per the old tax regime. FM Sitharaman further announced an increase in the deduction slab for the family pensioners. Under the new tax regime, the deduction will go up from ₹15,000 to ₹25,000.
New Vs. Old Tax Regime
Finance Minister Nirmala Sitharaman has announced the new tax regime that is said to benefit more than four crore salaried employees as well as pensioners.
| Income Range | Old Tax Regime | New Tax Regime |
| 0 to Rs 2,50,000 | Nil | Nil |
| Rs 2,50,001 to Rs 3,00,000 | 5% | Nil |
| Rs 3,00,001 to Rs 5,00,000 | 5% | 5% |
| Rs 5,00,001 to Rs 6,00,000 | 20% | 5% |
| Rs 6,00,001 to Rs 9,00,000 | 20% | 10% |
| Rs 9,00,001 to Rs 10,00,000 | 20% | 15% |
| Rs10,00,001 to Rs12,00,000 | 30% | 15% |
| Rs 12,00,001 to Rs 15,00,000 | 30% | 20% |
| Rs15,00,001 and above | 30% | 30% |
What Does it Imply?
Nirmala Sitharaman mentioned that people choosing the new tax regime will be able to save ₹17,500 per financial year. The salaried employees having an annual income of less than or up to ₹3 lakh per annum will have to pay no tax under this new tax regime.
Changes in the NPS
The National Pension System (NPS) deduction on employers' contributions to employees' basic salaries has increased from 10% to 14%. This change will apply to public sector companies and the private sector under the new regime, the finance minister said.
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