Income Tax New Rules: Union Finance Minister Nirmala Sitharaman has made significant changes in the new income tax regime in a bid to make it more attractive and acceptable among the masses. Income Tax New Rules: complete details of how it calculates.
But experts feel that though the new tax regimes look attractive for the middle-class salaried individual, there are hidden clauses that the individuals should be careful of. New income tax regime has seen a major revamp in the income tax slab rates for 2023-24.
The basic exemption limit under the new income tax regime has been hiked to Rs 3 lakh. The income tax rebate limit available for salaried and individual taxpayers under the new income tax regime has been hiked to Rs 7 lakh from the present Rs 5 lakh.
Among the key highlights of new tax regime would be, the exemption limit to the salary of Rs 7 lakh. This means, a taxpayer whose income is Rs 7 lakh will not be required to pay any tax. But this is not the case with the old regime, where the exemption limit is Rs 5 lakh.
Further, Finance Minister Nirmala Sitharaman in her budget speech, proposed to change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to Rs 3 lakh.
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New revised tax rates are:
– Income slab of Rs 3 lakh: No tax levied
– Income of Rs 3 lakh to Rs 6 lakh: 5% tax rate
– Income of Rs 6 lakh to Rs 9 lakh: 10% tax rate
– Income of Rs 9 lakh to Rs 12 lakh: 15% tax rate
Income of Rs 12 lakh to Rs 15 lakh: 20% tax rate
– Above Rs 15 lakh income: 30%.
FM Nirmala Sitharaman announced that the new income tax regime will be the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime.
– New tax regime is announced as a default regime. However, taxpayers will have the option to choose the old regime.
No tax is to be paid for income up to ₹3 lakh.
– The personal tax slabs have been reduced from 6 to 5.
– The income Tax rebate limit is increased to ₹7 lakh from ₹5 lakh
– The surcharge rate is slashed to 25% from 37% under the new tax regime.
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The previous new tax regime, no tax was levied on income to ₹2.5 lakh. Other tax rates were:
– Income Rs 2.5 lakh to Rs 5 lakh: 5% rate
– Income Rs 5 lakh to Rs 7.5 lakh: 10% rate
– Income Rs 7.5 lakh to Rs 10 lakh: 15% rate
– Income Rs 10 lakh to Rs 12.5 lakh: 20% rate
– Income of Rs 12.5 lakh to Rs 15 lakh: 25% rate
– Above Rs 15 lakh income: 30% rate.
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