Big relief to income tax payers, new order issued, tax exemption announced!
New Income Tax Slab 2023 in Budget: There have been 5 major announcements regarding personal income tax in the Union Budget. In this budget, the new tax regime has been made the default tax regime. But taxpayers will have the option to choose the old regime. Know the complete details.
The budget of the country has been presented. Finance Minister Nirmala Sitharaman presented the country’s Union Budget in the Parliament today, February 1, 2023. There were hopes of relief to the employed people across the country regarding income tax and the Finance Minister has made big announcements regarding income tax . There have been 5 big announcements in personal income tax
First of all, he said that the rebate which has been available on income up to 5 lakhs in the new tax regime, will be implemented for income up to 7 lakhs. i.e. new tax regimeNo tax will have to be paid on income up to 7 lakhs with rebate. In this budget, the new tax regime has been made the default tax regime.
But taxpayers will have the option to choose the old regime. Apart from this, the 6 income tax slabs implemented in 2020 were reduced to 5 now. In the new regime, the basic exemption on income tax will be up to Rs 3 lakh. Along with this, the benefit of standard deduction will be available in the new tax regime
Income Tax New Tax slab: What will be the new tax slab?
0 to 3 lakh 0%
3 to 6 lakh 5%
6 to 9 lakh 10%
9 to 12 lakh 15%
12 to 15 lakh 20%
More than 15 lakh 30%
Income Tax Slab Budget 2023 Announcements: 5 big announcements on income tax
1. In the old and new tax regime, those with income up to 5 lakh do not pay any kind of tax. But the limit of rebate is being increased to Rs 7 lakh in the new tax regime. That is, in the new tax regime, those with an income of 7 lakhs will no longer have to pay any tax.
2. A new tax regime was brought in 2020 for the middle class, which had 6 tax slabs, it is being reduced to 5. And the tax exemption limit has been increased from 2.5 lakh to 3 lakh.
3. Standard deduction limit has been increased for salaried taxpayers and pensioners, but it will be applicable on income of Rs 15.5 lakh. On this much income, he will get a profit of Rs.52,500. The limit of standard deduction on income below this will remain 50,000 only.
4. The new tax regime will be the default tax regime, but you will have the option of the old tax regime.
5. Announcement has been made on leave encashment. Now the exemption limit has been increased to 25 lakhs for encashing leave on retirement of a salaried employee. Till now this exemption was available on the limit up to 3 lakhs.
6. The maximum tax rate in the country is 42.74%, which has been reduced from 37% to 25% in the new tax regime. Now the maximum tax rate will be reduced to 39%.
Income Tax New Regime Tax Slab: What was the tax slab in the new regime now?
Nil up to 2.5 lakh
Between 2.50 lacs to 5 lacs 5% of the total income which is more than 2.5 lacs
Between 5 lakh to 7.50 lakh 10% of total income which is more than 5 lakh + Rs 12,500
Between 7.50 lakh to 10 lakh 15% of total income which is more than 7.5 lakh + Rs 37,500
Between Rs 10 lakh to Rs 12.50 lakh 20% of total income which is more than Rs 10 lakh + Rs 75,000
Between 12.50 lacs to 15 lacs 25% of total income which is more than 12.5 lacs + Rs 1,25,000
Above 15 lakhs 30% of total income which is more than 15 lakhs + Rs 1,87,500