Income Tax News: On February 1, the nation’s finance minister, Nirmala Sitharaman, will deliver the budget. However, because it’s election year, the budget will only be temporary. This budget will be voted on account, as stated by the Finance Minister himself. Election years do not see the presentation of the entire budget. The entire budget is presented by the newly elected government, which takes office two months after the election results.
Expectations for Tax Exemptions
The public awaits budget announcements 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 certain adjustments to the income tax slabs may also be made when the complete budget is unveiled in the upcoming year. However, one should be aware of the new and old tax slab rates before the fiscal year ends.
What tax slab is the best fit for you, New or Old Income Tax Regime?
At the start of the fiscal year, there is a chance to select the tax slab. However, there is time for correction at the end of the fiscal year if something goes wrong. In this case, you can now understand if there is any confusion about the new and old slabs. The slab that is the ideal fit for you is what matters most.
To what extent does the new tax regime provide benefits?
Following the modifications outlined in Budget 2023, taxpayers with income taxes up to Rs 7 lakh are exempt from paying taxes under the new tax system. For individuals in this income range, the new tax system is a good choice. Because there is a 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 will be due.
The tax slabs under the new tax regime
- Income up to Rs 3 lakh is tax-free.
- 5 percent income tax (tax rebate in section 87A) up to ₹ 3-6 lakh
- 10% tax on earnings between Rs. 6 and Rs. 9 lakh
- 15% tax on income between Rs 9-12 lakh
- 20% tax on income between ₹ 12 and 15 lakh
- 30% tax on earnings of ₹15 lakh or more
The tax slabs under the old tax regime
- There is a basic exemption tax exemption of up to Rs 2.5 lakh on income.
- 5% tax on earnings from ₹ 2.5 to ₹ 5 lakh
- 15% tax on earnings between ₹ 5 lakh and ₹ 7.5 lakh
- 20% tax on earnings between ₹ 7.5 lakh and ₹ 10 lakh
- Thirty percent of income over Rs 10 lakh is taxed.
Investments are exempt from taxes
In the previous tax slabs, tax exemption is available. You can claim tax exemption by making an investment in this. Tax exemptions on investments made in sections 80C and 80D are offered in this. Experts maintain that the previous tax system was still preferable for taxpayers who pay rent or mortgage interest.
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