Income Tax News: The tax slabs were modified by Finance Minister Nirmala Sitharaman in the budget that was unveiled on February 1, 2023. It is anticipated that certain adjustments to the income tax slabs may also be made when the complete budget is unveiled in the upcoming year.
Budget Day Dynamics
Comparing the income tax slabs of the new and old regimes: On February 1, Finance Minister Nirmala Sitharaman will deliver the nation’s budget. However, because it’s election year, the budget will only be temporary. This budget will be voted on account, as stated by the Finance Minister himself. Election years do not see the presentation of the entire budget. The entire budget is presented by the newly elected government, which takes office two months after the election results.
New Vs Old Income Tax Regime
Which tax bracket should you be in?
At the start of the fiscal year, there is a chance to select the tax slab. However, there is time for correction at the end of the fiscal year if something goes wrong. In this case, you can now understand if there is any confusion about the new and old slabs. The slab that is the ideal fit for you is what matters most.
Tax slabs in the new tax regime
- No tax on income up to ₹3 lakh
- 5% tax on income up to ₹3-6 lakh (tax rebate under section 87A)
- 10% tax on income up to ₹6-9 lakh
- ₹9- 15% tax on income of Rs 12 lakh
- 20% tax on income of ₹12-15 lakh
- 30% tax on income of ₹15 lakh or above
To what extent does the new tax regime provide benefits?
Following the modifications outlined in Budget 2023, taxpayers with income taxes up to Rs 7 lakh are exempt from paying taxes under the new tax regime. For individuals in this income range, the new tax regime is a good choice. Because there is a standard deduction of Rs 50,000 available in addition to the income of Rs 7 lakh. Generally, up to Rs 7 lakh 50, no tax will be due.
Tax slabs in the old tax regime
- There is a basic exemption tax exemption up to Rs 2.5 lakh in income
- 5 percent tax on income from ₹ 2.5 to ₹ 5 lakh
- 15 percent tax on income from ₹ 5 lakh to ₹ 7.5 lakh
- ₹ 7.5 lakh to ₹ 10 lakh 20 percent tax on income
- 30 percent tax is imposed on income above Rs 10 lakh.
Investments are exempt from taxes
In the previous tax slabs, tax exemption is available. You can claim tax exemption by making an investment in this. Tax exemptions on investments made in sections 80C and 80D are offered in this. Experts maintain that the previous tax regime was still preferable for taxpayers who pay rent or mortgage interest.
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