Income Tax Updates: For those who pay income taxes, there is good news. The Finance Minister has finally provided you with excellent news if the high income tax is causing you any concern. According to information provided, Finance Minister Nirmala Sitharaman, you are no longer required to pay taxes on income up to Rs 10 lakh. Yes. Nirmala Sitharaman made income up to 7 lakhs tax free in Budget 2023, but now we’ll tell you about another way that would let you pay no taxes on income up to 10 lakhs.
Tax Saving Opportunity
You can save taxes on income up to Rs. 10 lakhs if you arrange your taxes well. According to tax experts, you must choose the previous tax system if you want to earn up to Rs. 10 lakhs tax-free.
Finance Minister’s Announcement
Let us inform you that the Finance Minister has expanded the base tax exemption under the new tax regime in this year’s budget. The Finance Minister had stated that its scope would be expanded in the budget. The previous tax structure remained unchanged at the same time. Allow us to inform you that under the previous tax structure, tax-saving options ranged from house loans to insurance policies.
Salaried Individuals’ Tax Planning
Media sources claim that salaried individuals can avoid taxes on income as high as Rs 10 lakh, but careful planning is need to achieve this. Under the previous tax structure, a taxpayer might earn up to 10 lakhs tax-free if they planned ahead.
In the previous tax system, you might have saved Rs 1.5 lakh by investing in NSC, ELSS, PPF, and EPF under section 80C of the Income Tax Act. You will owe Rs 8.5 lakh in taxes after this Rs 1.5 lakh is subtracted.
Section 80C Investments
In addition, you have the option to save up to Rs 50,000 in NPS. This is under section 80CCD (1B) for saving. In addition, you can save up to Rs 2 lakh in taxes if you have purchased a home. A medical policy might also help you save up to Rs 25,000 in taxes. In addition, you can receive a further discount of up to Rs 50,000 if you buy health insurance in your parents’ names and they are elderly citizens.
Tax on Income Exceeding Rs 5 Lakh
Furthermore, the Income Tax Act’s regulations provide that the tax on income exceeding Rs 5 lakh is Rs 12,500 (5% of Rs 2.5 lakh). Because you have fallen into the 5 lakhs tax slab by utilising all of the deductions, you are eligible for a refund of Rs 12500 under Income Tax Section 87A, meaning you will not be required to pay any taxes.