Income Tax News: Impacting personal taxation, savings, and investment plans, the Union government announced several significant changes to the income tax rules for the financial year 2023–24 for both salaried and non-salaried taxpayers. With inflation at significantly higher levels, the changes in taxation policy had been both constrained and determined to meet the needs of the country. The changes range from deduction and exemption limits to making the new income tax regime the default one.
Life Insurance Premium Rules
The following are some significant income tax announcements from 2023. Apart from the rules pertaining to life insurance premiums and the maximum amount of leave encashment, these rules exclusively pertain to the new tax regime.
Default Tax Regime
Taxpayers can still use the previous income tax regime, but as of April 1, 2023, the government has made the new one the default.
Income Tax Slabs
In its 2023 Budget, the government revealed new income tax slabs. Tax rates are as follows: 0% on income under Rs 3 lakh, 5% from Rs 3 lakh to Rs 6 lakh, 10% from Rs 6 lakh to Rs 9 lakh, 15% from Rs 9 lakh to Rs 12 lakh, 20% from Rs 12-15 lakh, and 30% from Rs 15 lakh and above.
Income Tax Rebate
Previously, no tax was due by those whose annual income did not exceed Rs 5 lakh. Nevertheless, the cap has been raised to Rs 7 lakh in the 2023 budget. People who make up to Rs 7 lakh a year are therefore exempt from paying taxes.
Standard Deduction
The new income tax regime has extended the standard deduction from the previous one, offering salaried individuals a substantial reprieve.
Leave Encashment Exemption Limit
Citing a general salary increase, the leave encashment amount claimed as exemption for non-government employees has been raised to Rs. 25 lahks from Rs. 3 lahks.
Life Insurance Premiums
After April 1, 2023, life insurance policies with maturity proceeds that total more than Rs. 5 lakh in annual premiums will be subject to taxation.
Keep watching our YouTube Channel ‘DNP INDIA’. Also, please subscribe and follow us on FACEBOOK, INSTAGRAM, and TWITTER
