Big Changes in Income Tax Limit: Narendra Modi govt give good news to taxpayers

Finance Minister Nirmala Sitharaman presented Union Budget 2023, her fifth one, in the Lok Sabha today, 1 February 2023. She had her task cut out to maintain the world’s fastest-growing economy tag for India while staying fiscally prudent. Big Changes in Income Tax Limit: Narendra Modi govt give good news to taxpayers.

Finance Minister Nirmala Sitharaman on Wednesday tweaked the income tax slab rates to provide some relief to the middle class by announcing that no tax would be levied on annual income of up to Rs 7 lakh under the new tax regime. She also allowed a Rs 50,000 standard deduction to taxpayers under the new regime, where assessees cannot claim deductions or exemptions on their investments.

“The income rebate limit increased to Rs 7 lakh from Rs 5 lakh in new tax regime,” announces Finance Minister Nirmala Sitharaman. “It’s heartening to see that the new income tax slabs are offering considerable respite to low income groups and the great Indian middle class.

Raising the bar for 0 income tax from Rs 5 lakh to Rs 7 lakh and reducing the taxation for those earning between Rs 6 – 9 lakh and Rs 12-15 lakh will definitely leave more disposable income for many Indians who had been reeling under the impact of inflation. This is likely to have a positive impact on consumer spending and the economy at large.

In addition, even high-income groups will enjoy a lower tax rate of 39% instead of 42.7%. We can already see the positive impact this has had on the stock markets as well with SENSEX surging over 750 points almost immediately after the budget announcement.” said Nikhil Aggarwal, Founder & CEO at Grip.

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Tax rebate limit rose to 7 lakh from 5 lakh

0-3 lakh nil

3-6 lakh 5%

High govt revenue: What it means for Budget 2023

6-9 lakh 10%

9-12 lakh 15%

12-15 lakh 20%

Above 15 lakh 30%

The income tax slabs were not changed since 2014. The basic personal tax exemption limit was last revised in 2014.

Dressed in a red saree with black and golden border, Sitharaman continued with the tradition she set in 2019, carrying the budget speech in a ‘bahi-khata’, which she used after ditching the briefcase. She kept a digital tablet in a red bahi khata style pouch.