Thursday, March 23rd, 2023

Finance minister Nirmala Sitharaman announced Five changes in personal taxation. Have you read it completely?

As per the finance minister, the income tax slabs under the new tax regime gives big relief to middle-class people, and below are the list as per the new income tax.

1) Basic exemption limit is hiked from Rs 3 lakh to Rs 2.5 lakh

2) Rebate under section 87A has been hiked from Rs 5 lakh to Rs 7 lakh

3) The income tax slabs under the new income tax regime will be as follows:

  • Up to Rs 3 lakh – 0% tax – Nil
  • Between Rs 3 and 6 lakh – 5% tax
  • Between Rs 6 and 9 lakh – 10% tax
  • Between Rs 9 lakh and Rs 12 lakh – 15% tax
  • Between Rs 12 lakh and Rs 15 lakh – 20% tax
  • Above Rs 15 lakh above – 30% tax

4) Standard deduction introduced for salaried and individual taxpayers under the new income tax regime.

5) Highest surcharge rate reduced from 37% to 25% percent in the new tax regime

‘Mahila Samman Saving Certificate’

The Finance minister has announced a small savings scheme for women which is really helpful for the middle class where women prove themselves to be responsible for a good family.

This scheme is available for the next 2 years and the interest rate has been fixed at 7.5% per annum. The maximum investment limit will be Rs 2 lakh. A partial withdrawal option will also be available.

Highlights of the Income-tax Regime

The maximum investment limit under Senior Citizen Savings Scheme (SCSS) has been hiked from Rs 15 lakh to Rs 30 lakh.

For business establishments required to have Permanent Account Number (PAN), it will be used as a common identifier for all digital systems of specified government agencies, announced by Sitharaman in Income Tax Budget 2023.

The Finance Minister has provided a big relief for smaller taxpayers by increasing rebates and ensuring that there is no income tax levied up to Rs 7 lakh in income. Also, the revised tax slabs under the new tax regime and the extension of the standard deduction will ensure that the salaried people will have a little more cash in hand this coming year for fuel consumption and or investments in India.

This budget looks promising for middle-class taxpayers with enhanced slab limits. Revisiting the leave encashment exemption in line with prevalent salary levels is much appreciated. Another point on Income tax concessions and exemptions, the limit is fixed for capital gain exemption in case of residential house limit is proposed to be fixed on the exemption for proceeds from insurance policies.

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