Income tax slab has been changed in the new tax system.
• A person earning Rs 15 lakh will have to pay Rs 1.5 lakh, down from Rs 1.87 lakh under the new tax structure, FM Nirmala Sitharaman said today
In a major relief to the country's growing middle class, the government has tweaked the income tax slabs in the new tax regime, saying no tax will be levied on income up to ₹7 lakh a year - above ₹5 lakh.
In her Budget 2023 speech, Union Finance Minister Nirmala Sitharaman said that the government proposes to make the new tax structure a default tax option.
However, there has been no change in the old tax regime. Income tax slabs have been changed in the new tax regime.
FM Sitharaman gave an example: "A person with an annual income of Rs 9 lakh will have to pay only Rs 45,000. It was Rs 60,000 under the calculation applicable till this financial year. A person with an income of Rs 15 lakh will be eligible for the new tax structure." Under ₹1.87 lakh less ₹1.5 lakh tax will have to be paid."
The Finance Minister said that the government has also proposed to reduce the highest surcharge rate in the new tax regime from 37 per cent to 25 per cent.
What's new in the new income tax regime
Under the new income tax regime in Budget 2023-24, the basic exemption limit has been increased from ₹ 2.5 at present to ₹ 3 lakh.
- Exemption under section 87A has been increased from ₹5 lakh to ₹7 lakh
There will now be five income tax slabs on taxable income computed after all exemptions:
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