Income Tax Slab Change: A Significant Update for Taxpayers Budget 2024 may alter the income tax slab; stay up to date here

Income Tax Slab Change: A Significant Update for Taxpayers Budget 2024 may alter the income tax slab; stay up to date here

Income Tax Slab Change: A Significant Update for Taxpayers Budget 2024 may alter the income tax slab; stay up to date here

Old income tax vs new income tax slab: Finance Minister Nirmala Sitharaman altered the tax slab in the budget that was unveiled on February 1, 2023. It is anticipated that some adjustments to the income tax slabs may also be made when the whole budget is unveiled in the next year.

Comparing the new and previous income tax slabs: On February 1, the nation's finance minister, Nirmala Sitharaman, will deliver the budget. However, since it's election year, the budget will only be temporary. It has been stated by the Finance Minister directly that there would be a vote on this budget. Election years do not see the presentation of the whole budget. A complete budget is provided by the newly elected government, which takes office two months following the results of the election.

The public awaits budget news such as tax exemptions. The tax slabs were modified by Finance Minister Nirmala Sitharaman in the budget that was unveiled on February 1, 2023. It is anticipated that some adjustments to the income tax slabs may also be made when the whole budget is unveiled in the next year. However, it is important to comprehend both the new and old tax bracket rates before the conclusion of the fiscal year.

Old vs. new income tax structure

1. What tax slab should you be in?

At the start of the fiscal year, there is a chance to choose the tax slab. However, there is opportunity for rectification at the end of the fiscal year if anything goes wrong. If there is any doubt in this respect about the new and old slabs, you may now comprehend. Making the appropriate decision on which slab is best for you is crucial.

2. How much of an advantage does the new tax structure offer?

Following the adjustments outlined in Budget 2023, taxpayers who pay income tax up to Rs 7 lakh under the new tax system would not be subject to any taxes. For individuals in this salary bracket, the new tax structure is a solid choice. Because there is an additional 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 would be due.

3. The new tax system's tax slab

- Income up to Rs 3 lakh is tax-free.

5% tax on income up to ₹3-6 lakh (section 87A exempts income from this tax).

- 10% income tax between Rs. 6 and Rs. 9 lakh

- 15% tax on income between Rs 9 and Rs 12 lakh

20% tax on earnings between Rs 12 and Rs 15 lakh

- A 30% tax on income beyond Rs 15 lakh

4. The former tax system's tax slab

There is a basic exemption tax exemption of up to Rs 2.5 lakh on income.

5% tax on earnings from Rs 2.5 to Rs 5 lakh

- Taxes ranging from Rs 5 lakh to Rs 7.5 lakh at a rate of 15 percent

- 20% tax on earnings from Rs 7.5 lakh to Rs 10 lakh

- Taxes over Rs 10 lakh are subject to 30 percent withholding.

5. Investments are eligible for tax exemption.

The previous tax slab offers the possibility of obtaining tax exemption. You may claim tax exemption by making an investment in this. In this, investments made under sections 80C and 80D are free from taxes. Experts maintain that the previous tax structure was still preferable for those who pay rent or mortgage interest.

Has 87A's exemption been raised?

The Section 87A exemption was extended to include income up to Rs 7 lakh in the most recent budget. A tax exemption of Rs. 5 lakh was granted on income of Rs. 12500, and on income of Rs. 7 lakh, it was raised to Rs. 25000. This implies that up to Rs 7 lakh in income, taxpayers who opt for the new tax system would not be required to pay any taxes at all.