Budget 2023-24 : No Tax On Income Of Up to Rs 7 Lakh Under New Tax Regime
Budget 2023-24 : The number of tax slabs under the new tax framework has been lowered from 7 to 6 by the Budget 2023–24.
According to the Union Budget 2023–24, India’s diligent middle class would not be required to pay any taxes if their yearly income is up to Rs 7 lakh. However, this is the case if a taxpayer chooses the new tax structure outlined in Section 115BAC of the Income Tax Act of 1961.
The baseline exemption amount under the new tax system would increase from Rs 2.5 lakh to Rs 3 lakh in accordance with the modifications suggested in the Union Budget.
“A person making Rs 9 lakh will only be required to pay Rs 45,000 in taxes. In addition, a person earning Rs 15 lakh will now pay Rs 1.5 lakh in taxes rather than Rs 1.87 lakh under the new tax system, according to finance minister Nirmala Sitharaman’s Budget Speech.
On the other side, the Budget has also added a provision for a basic deduction of Rs 50,000 under the new tax system for salaried and retirees. Which was previously only accessible under the old tax system.
“I suggest extending the standard deduction’s advantages to the new tax system. Thus, any salaried individual earning Rs 15.5 lakh or more will stand to gain Rs 52,500, according to Sitharaman.
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What is standard tax deduction?
The standard deduction, which was first offered in the Union Budget of 2018, is provided in place of the transportation allowance and medical reimbursement. The standard deduction cap was raised from Rs 40,000 to Rs 50,000 in the interim budget for 2019. Individual taxpayers may use the standard deduction without providing their employer with any receipts.
New tax regime is the default option
When presenting the budget to the Lok Sabha on February 1, 2023. Finance minister (FM) Nirmala Sitharaman noted that taxpayers have the choice of continuing with the previous tax system. The new tax system is still the default choice, she continued. As a result, starting on April 1, 2023. Taxpayers who want to adopt the old tax system must do so individually at the start of the fiscal year.
The number of tax slabs under the new tax regime has been decreased from 6 to 5 as part of the Budget 2023–24.
Budget 2023-24: Tax slab under new tax regime
|Income||New tax regime slab|
|Up to Rs 3 lakh||Nil|
|From Rs 3 lakh to Rs 6 lakh||5%|
|From Rs 6 lakhs to Rs 9 lakh||10%|
|From Rs 9 lakh to Rs 12 lakh||15%|
|From Rs 12 lakhs to Rs 15 lakh||20%|
|Above Rs 15 lakh||30%|
“The lowered tax slabs under the new tax system and the increase of the standard deduction would ensure that the salaried class will have a bit more money in hand this coming year to fuel spending and perhaps investments in India.”
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