From reduced TDS for salaried tax-payers to higher tax on capital gains: Major IT rule changes from April 2023

Starting from April 2023, new income tax rules will come into effect, affecting various aspects of taxation for common taxpayers. These changes were proposed in the Union Budget 2023, presented in February.

Salaried individuals will benefit from reduced TDS deductions under the new tax regime. Taxpayers with a taxable income less than Rs 7 lakh and who opt for the new tax regime will not be charged any TDS. Additional exemption has been provided under section 87A of the Income Tax Act.

Listed debentures in dematerialized form will be exempt from TDS deductions under section 193 of the Income Tax Act, but a 10 per cent TDS will be deducted on all other payments.

Players of online games who win money will now be required to pay a 30 per cent tax under the new section 115 BBJ of the Income Tax Act. This tax will be deducted as TDS.

The benefits available under Sections 54 and 54F of the Income Tax Act will be reduced from the new financial year. Only capital gains up to Rs 10 crore will be exempted under these sections, and capital gains above this will be taxed at a rate of 20 per cent with the benefit of indexation.

From April 1, 2023, higher capital gains tax will be required on the profit made from the sale of a property. Interest claimed under section 24 will not be included in the cost of buying or repairing, and capital gains arising from the transfer, redemption, or maturity of market-linked debentures will now attract short-term capital gains tax.

Physical gold converted into Electronic Gold Receipt or vice versa from April 2023 will not be subject to capital gains tax, provided the conversion is done through a SEBI registered vault manager.

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