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NEW DELHI - India will raise the personal income tax rebate limit to 700,000 rupees ($8,565) under the new tax regime from the previous 500,000 rupees, Finance Minister Nirmala Sitharaman said in her budget speech on Wednesday.

The tax slabs will be cut to five from seven earlier, Sitharaman said.

"This will provide major relief to all tax payers in the new regime," Sitharaman said in her budget speech.

"The new tax regime has got a great boost by the budget announcements made by the FM (finance minister)," said Alok Agrawal, partner, Deloitte India.

"Taxpayers at both ends of the spectrum will be encouraged under the new regime as there will be no liability up to annual income of Rs 700,000 on the one hand and surcharge on annual income above 5 crores has been reduced from 37 to 25% at the high income end."

She said an individual with an annual income of 900,000 rupees will be required to pay 45,000 rupees as income tax, while those with an income of 1.5 million rupees would pay 150,000 rupees or 10% of their income.

($1 = 81.7240 Indian rupees)