Budget 2023 overhauls new income tax regime, people earning up to Rs 7 lakh needn’t pay income tax
NEW DELHI,FEB 1 :Finance Minister Nirmala Sitharaman in her Union Budget speech made five major announcements to overhaul and sweeten the new income tax regime. The government made income of up to Rs 3 lakh tax-exempt under the new income tax regime. Those with income of up to Rs 7 lakh will now get a rebate and needn’t pay any income tax under the new regime. Sitharaman also said that the new income tax regime would be the “default regime”.
Earlier, total income of up to Rs 2.5 lakh was exempt from tax under the new income tax regime. The rebate that is now being made available to people who earn up to Rs 7 lakh a year was earlier available to taxpayers earning up to Rs 5 lakh per year.
The taxation structure has also been reduced to five brackets. Sitharaman said taxpayers will pay Rs 45,000 tax for income of up to Rs 9 lakh as against Rs 60,000 earlier. She also reduced the highest surcharge rate from 37% to 25% in the new tax regime.
New Income Tax Slabs 2023-24
A 5 per cent tax was earlier levied on income between Rs 2.5 lakh and Rs 5 lakh and a 10 per cent tax was applicable on income between Rs 5 lakh and Rs 7.5 lakh. For income between Rs 7.5 lakh and Rs 10 lakh, a tax rate of 15 per cent was applicable and 20 per cent rate was levied on income between Rs 10 lakh and Rs 12.5 lakh. A tax rate of 25 per cent was applicable for income between Rs 12.5 lakh and Rs 15 lakh, and 30 per cent on earning of above Rs 15 lakh.
The new income tax regime or the alternative concessional tax regime was announced in the 2020-21 Budget.
How much income tax do you pay under new regime slabs?
The new income tax regime, under which individuals and Hindu Undivided Families were to be taxed at lower rates if they did not avail of specified exemptions and deductions, didn’t see encouraging results.
-The India Today
