Income Tax New Slabs: How much tax can you save? Read these calculations

The Union Budget 2023 was announced by Finance Minister Nirmala Sitharaman in Parliament today, with the introduction of the New Income Tax Regime for the salaried class people in the country. The new tax regime was introduced initially in 2020, and it is set to bring major savings for employees.

People who opt for the new tax regime will be able to seek the benefits of saving tax on their overall annual income, as opposed to the old tax regime. The new income tax regime has put forward six tax slabs, all of which have a different percentage of annual income tax due.

While presenting the Union Budget 2023 today, FM Nirmala Sitharaman announced that the rebate limit for individual taxpayers has been increased from Rs 5 lakh to Rs 7 lakh. This means that people earning up to Rs 7 lakhs annual salary won’t have to pay any income tax.

The FM said in the Parliament today, “Currently, those with income up to Rs 5 lakh do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to Rs 7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs 7 lakh will not have to pay any tax.”

Here are the six income tax slabs under the New Tax Regime –

• Rs 0-3 lakh: Nil
• Rs 3-6 lakh: 5 per cent
• Rs 6-9 lakh: 10 per cent
• Rs 9-12 lakh: 15 per cent
• Rs 12-15 lakh: 20 per cent
• Over Rs 15 lakh: 30 per cent

After the tax revisions in the new tax regime, there are big savings in town for the salary class people in the country. Under the New Income Tax Regime, all salaried employees will be able to save a major chunk of their taxes.

• Annual salary Rs 7 lakh – No tax
• Annual Salary Rs 9 lakh: Rs 15,000 savings
• Annual salary Rs 12 lakh: Rs 24,000 savings
• Annual salary Rs 15 lakh: Rs 37,500 savings

As per the Union Budget 2023, the income tax exemption limit has been increased by Rs 50,000 to Rs 3 lakh, and the rebate has been increased from Rs 5 lakh to Rs 7 lakh.  For all those opting for the new regime apart from the old regime, a standard deduction of Rs 50,000 has also been extended.

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