Central Finance Minister Nirmala Sitharaman Made a key Budget Announcement to Reassure Employees. The income tax exemption limit of Rs.5 lakhs will be raised to Rs.7 lakhs. However, this is only applicable to those who have chosen the New income tax regime.
Income Tax Slabs Latest Updates 2023-2024: Tax rebate limit raised, number of slabs reduced. Key personal tax announcements
New Income Tax Slabs FY 2023-2024 Updates Released By : In terms of personal Taxation, the Finance Minister proposed a new tax regime as the default system, with no tax on income up to Rs 7 lakh. The basic tax slabs have been Revised, providing some relief to taxpayers, and the highest surcharge rate has been reduced to 25% from 37%, providing significant relief to ultra-high-income taxpayers. However, the highest tax rate remains unchanged at 30% for income above Rs. 15 lakhs, providing insignificant benefits to those with income between Rs 15 lakhs and Rs 2 crores.
Nirmala Sitharaman’s Budget Speech 2023 included a number of proposals to help Tax payers in the lowest and Highest Tax Brackets. Individuals Earning up to Rs 7 lakh will be Exempt from Paying Tax Under The New Regime, According to FM’s Proposal. In the New Tax Regime, the Finance Minister has proposed lowering the Highest Surcharge Rate for individuals in the Highest Tax bracket from 37% to 25%. The Maximum Tax Rate for Those in the Highest Tax Bracket Would be Reduced to 39% Under this Proposal. The FM also Announced Several proposals to help salaried workers, senior citizens, and pensioners.
What Does the increased Tax Rebate limit Mean?
raising the limit to 7lakh rupees means that a person whose income is less than Rs.7 lakhs does not need to invest anything to claim exemptions, and his or her entire income is tax-free regardless of the amount invested. This will give the middle-class income group more purchasing power because they will be able to spend their entire income without having to worry about investment schemes to take advantage of tax breaks
Income Tax New Slabs 2023-2024
Income tax slabs refer to the different tax rates that apply to different levels of taxable income for an individual in a financial year. The government sets the income tax slabs and the corresponding tax rates each financial year, which are applied to an individual’s taxable income after considering deductions and exemptions.
Typically, the government sets different tax slabs for different categories of taxpayers, such as individuals, Hindu Undivided Families (HUFs), and companies. The tax slabs and rates can change from year to year, based on economic and other factors. The exact details of the current income tax slabs and rates for the financial year you are referring to can be obtained from the official websiteof the Indian government’s Department of Revenue.
Rs 0 to Rs 3 lakh
Nill or 0% TAX
Rs 3 to 6 lakh
5% tax
Rs 6 to 9 lakh
10% tax
Rs 9 lakh to Rs 12 lakh
15% tax
Rs 12 lakh to Rs 15 lakh
20% tax
Above Rs 15 lakh above
30% tax
Old Tax Regime Slab Rates
Income Tax Slabs
Old Tax Rates for Senior Citizens
Rs, 0 – Rs. 3,00,000
0%
Rs. 3,00,000 – Rs. 5,00,000
5%
Rs. 5,00,000 – Rs. 10,00,000
20%
More than Rs. 10,00,000
30%
Slab Rates for Senior Citizens in the Old Tax Regime
As shown in the table above, the Old Tax Regime Slab Rates for Senior Citizens provide little relief to senior citizens in India, as their basic exemption limit is Rs. 3 Lakhs in FY 2022-23, on which they do not have to pay income tax.
In addition, if their annual income is less than Rs. 5 lakhs in a fiscal year, they are eligible for a tax rebate under Section 87A. This tax credit under Section 87A is also available under the New Tax Regime.
LIVE Updates on the New Income Tax Slab Budget 2023-2024:
In the new tax regime, the standard deduction has been increased to Rs 52,500.
Individuals earning Rs 15.5 lakh or more are eligible for a standard deduction of Rs 52,500 under the new tax regime. In the old regime, the standard deduction was Rs 50,000, and the maximum deduction for professional tax was Rs 2,500.
The government intends to improve grievance procedures. Effective grievance mechanism for direct Taxpayers
A person with a yearly income of Rs 9 lakh will have to pay only Rs 45,000.
Under the new tax regime, income up to Rs 3 lakh is tax-free; income between Rs 3-6 lakh is taxed at 5%; and income above Rs 15 lakh is taxed at 3%.
Under the new tax structure, an individual earning Rs 15 lakh will have to pay Rs 1.5 lakh in tax, down from F 1.87 lakh.
The government will increase the limit for cash deposits and loans made by Primary Agricultural Credit Societies to Rs 2 lakh per member.
New Income Tax Regime How Much Income Tax You Will Save
Income
Savings
Upto 7 lakh
No Tax
9 lakhs Income
RS 15,600
15 lakh Income
RS 39,000
Latest Income Tax Slabs FY 2023-2024 Benefits And Drawbacks
Income tax slabs are defined as the different ranges of taxable income, with each slab attracting a different rate of tax.
Benefits:
Progressive taxation: Tax is levied at a higher rate on higher income levels, which is considered to be a fair method of taxation as those with a higher income can afford to pay more.
Tax exemptions and deductions: There are various exemptions and deductions available under the income tax act, which help in reducing the overall tax liability.
Revenue generation: The income tax is a major source of revenue for the government and helps in funding various welfare and development programs.
Drawbacks:
Complexity:The tax laws and calculation of tax liability can be complex, requiring the assistance of tax professionals, leading to additional expenses.
Tax evasion: There is a significant level of tax evasion in the country, leading to loss of revenue for the government.
Inequity: The tax system can result in inequity, as those with lower incomes may end up paying a higher proportion of their income as tax compared to those with higher incomes.
Overall, the income Tax Slabs are an important Aspect of the Tax System and while they have Their Advantages, they also Have Some Drawbacks.
