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What tax regime to choose to benefit most from the recent changes in Direct Tax Code?
The major change in the Income Tax Act in the Union Budget 2020 was the shift to the dual tax regime. Now individuals, like the more sophisticated corporates will also have a choice. Companies can choose between 30% tax with all exemptions intact or 22% tax without any exemptions or rebates. Similarly, now the individuals can also choose between higher tax with all exemptions intact and a lower tax rate with just 30 of the 100 exemptions intact. What should you choose, under what conditions and how should you make that choice? Let us first look at the respective tax rates under the new and old regime for different levels of income.
What tax regime to choose to benefit most from the recent changes in Direct Tax Code?
The major change in the Income Tax Act in the Union Budget 2020 was the shift to the dual tax regime. Now individuals, like the more sophisticated corporates will also have a choice. Companies can choose between 30% tax with all exemptions intact or 22% tax without any exemptions or rebates. Similarly, now the individuals can also choose between higher tax with all exemptions intact and a lower tax rate with just 30 of the 100 exemptions intact. What should you choose, under what conditions and how should you make that choice? Let us first look at the respective tax rates under the new and old regime for different levels of income.