Finance Minister Arun Jaitley today halved the income tax rate for persons earning between Rs 2.5 lakh and 5 lakh to 5 per cent, from the earlier rate of 10 per cent.
This means tax benefits of up to Rs 12,500, considering that persons in other income tax slabs of 20 per cent (income between Rs 5 lakh and Rs 10 lakh) and 30 per cent (income above Rs 10 lakh) will also pay lower tax.
(Check your income tax liability for assessment year 2018-19 after changes announced in Budget 2017)
However, the finance minister imposed a surcharge of 10 per cent on those earning up between Rs 50 lakh and Rs 1 crore. The current 15 per cent surcharge on those earning income above Rs 1 crore will stay, the Finance Minister said.
The finance minister also said that cash transactions above Rs 3 lakh would not be allowed.