India's Finance Minister announces significant changes to income tax regime for FY 2023-24.
New Tax Regime: Are you aware about the changes proposed by Finance Minister Nirmala Sitharaman in the Income Tax Regime for the financial year 2023-2024? So, one of the major changes is the tax rebate for those with an annual income of up to Rs 7 lakh under the new tax regime. This move is aimed at encouraging salaried taxpayers to switch to a new tax regime that does not provide exemptions on investments.
Under the revamped tax regime, there will be no tax for income up to Rs 3 lakh. Income between Rs 3-6 lakh will be taxed at 5 per cent, Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent, and income above Rs 15 lakh will be taxed at 30 per cent. Additionally, a Rs 50,000 standard deduction will be allowed under the new regime.
In the new income tax brackets, the budget also included some deductions. Beginning on April 1, 2023, eligible individuals may claim these deductions under the new tax regime. For instance, salaried employees, and pensioners can only deduct Rs 50,000 as a standard deduction from their pay or pension income. Family pensioners, on the other hand, are now eligible for a standard deduction of Rs. 15,000.
If your company makes contributions to your NPS account, you are qualified to deduct such contributions from your gross income as a salaried employee. The Income-tax Act of 1961's Section 80CCD (2) allows for the claim of this deduction. Government and private sector employees each have a separate cap on what they can claim under this clause.
Did you know that salaried people who rent out their homes can take a 30 per cent standard deduction from the yearly property value? A property's annual worth is estimated by deducting the amount of municipal taxes paid from its actual value.
Last but not least, the government amended the Finance Bill 2023 to provide "marginal relief" to taxpayers who earn just a little bit more than Rs 7 lakh per year. Tax experts claimed that according to computation, individual taxpayers with income of Rs 7,27,777 would benefit from this relief even though the government has not established the income threshold that would be eligible for marginal relief.
According to Budget 2023, the Agniveer may deduct any sum paid or deposited to the Agniveer Corpus Fund under the newly proposed section 80CCH of the Income-tax Act from their income. The Agniveers registered in the Agnipath Scheme, 2022, will not be taxed on the money they receive from the Agniveer Corpus Fund. The Agniveer's contribution to their Seva Nidhi account, whether made by them or the Central Government, is recommended to be deducted while calculating total income.
Read more: Sukanya Samriddhi Yojana: Invest Rs 250 and get up to Rs 2.5 lakh at maturity
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 "Income Tax Regime, Finance Minister Nirmala Sitharaman, Union Budget 2023, Tax rebate, Salaried class taxpayers, New tax regime")
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