Union Budget 2023: 13 points to understand new Tax regime
Direct Tax proposals aim to maintain continuity and stability of taxation, further simplify and rationalise various provisions to reduce the compliance burden, promote the entrepreneurial spirit and provide tax relief to citizens.
By Newsmeter Network Published on 1 Feb 2023 7:50 AM GMT
PROVIDING TAX RELIEF UNDER NEW PERSONAL TAX REGIME
The new tax regime is a default choice, but old tax regime still remains an option
No tax changes in the old regime
FM Nirmala Sitharaman proposes to increase income tax rebate limit from 5 lakhs to 7 lakhs under new tax regime only
Individuals with annual income of 9 lakhs will have to pay only 45,000 tax (approx 5% of their income)
Individuals with annual income of 15 lakhs will have to pay only 1.5 lakh instead of 1.87 lakh under the new regime
Surcharge (additional charge on tax) reduced from 37% to 25% under the new regime
Highest tax rate 42.7 per cent. Propose to reduce highest surcharge rate from 37 per cent to 25 per cent under new tax regime. Reduction of maximum rate to 39 per cent
Limit of ₹ 3 lakh on leave encashment increased to 25 lakh
Resident individuals with total income up to ` 5,00,000 do not pay any tax due to rebate under both the old and new regime.
A standard deduction of ₹50,000 for salaried individuals and upto ₹15,000 Deduction from family pension is proposed to be allowed in the new regime as well.
Surcharge of income tax under new regime:
₹50 lakhs - ₹1 cr - 10%
₹1cr - ₹2 cr - 15%
₹2 cr and above - 25%
No change in surcharge is proposed for those who opt to be under the old regime.
Tax structure changed from six slabs to five slabs. Reduction in tax liability for those under regime in which:
Upto 3 lakhs - no tax
3 - 6 lakhs - 5% of total income
6 - 9 lakhs - 10% of total income
9 - 12 lakhs - 15% of total income
12 - 15 lakhs - 20% of total income
15 lakhs and above - 30% of total income
