The recent budget presented by the Indian government has brought significant changes to the income tax slab rates. These changes have been made to ease the burden on taxpayers and promote the growth of the economy. The new income tax slabs will be applicable for the financial year 2023–24, starting from April 1, 2023, and ending on March 31, 2024.
The basic exemption limit was raised to Rs 3 lakh from Rs 2.5 lakh under the new income regime. The new tax regime becomes the default option for taxpayers. However, they have the option to opt for the old tax regime. The income tax slabs have been revised under the new tax regime. Under the new tax regime, a standard deduction of Rs 50,000 has been introduced for salaried and pensioners.
The rebate under Section 87A has increased under the new tax regime for taxable incomes not exceeding Rs 7 lakh. Thus, individuals whose taxable income does not exceed Rs 7 lakh will not have to pay any taxes if they opt for the new tax regime in FY 2023–24. The highest surcharge rate is reduced to 25% from 37% under the new tax regime.
No changes have been made under the old tax regime for FY 2023–24. The income tax slabs and rates under the old tax regime will remain unchanged for FY 2023–24. Also, no changes have been announced in the deductions and exemptions that are available under the old tax regime. A rebate under Section 87A is available under the old tax regime if taxable income does not exceed Rs 5 lakh.
The new tax regime has become the default option for FY 2023–24. However, an individual or Hindu Undivided Family (HUF) has to choose between the old tax regime and the new tax regime every financial year. This is applicable if they do not have any business income.
If an individual taxpayer or HUF has a business income, these taxpayers are allowed to opt for the new income tax regime. However, once they’ve opted, they only have a once-in-a-lifetime opportunity to switch back to the old tax regime. Once they have switched back, they cannot opt for the new income tax regime in future financial years.
According to the new income tax slabs, if your annual income is up to Rs. 3,00,000, you won’t have to pay any income tax. For income between Rs. 3,00,001 to Rs. 6,00,000, the income tax rate is 5%. If your income falls between Rs. 6,00,001 to Rs. 9,00,000, the income tax rate is 10%. For income between Rs. 9,00,001 to Rs. 12,00,000, the income tax rate is 15%. For income between Rs. 12,00,001 to Rs. 15,00,000, the income tax rate is 20%. For those earning more than Rs. 15,00,001, the income tax rate is 30%.
The government always likes a responsible tax payer, and income tax returns come with a lot of exemptions to reward them. With proper management of assets and investments, citizens can make use of these exemptions and save huge amounts of money.
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