In a move that is being welcomed by the citizens of India, Nirmala Sitharaman, union minister of finance, Government of India announced that no income tax will have to be paid by citizens getting paid up to Rs 7 lakhs per year. Furthermore, new IT return forms are being introduced to ensure easier filing of returns. “Personal Income Tax for the hardworking middle class Currently, those with an income of Rs 5 lakhs do not pay any income tax and I proposed to increase the rebate limit to Rs 7 lakhs in the new tax regime,” said Sitharaman.
Other Highlights of Personal Income Tax in Budget 2023
Apart from the main income tax relief mentioned above, some of the other noteworthy announcements with regard to personal income tax are as follows:
- Highest surcharge rate reduced from 37% to 25%, and the maximum marginal rate has been reduced to 39 percent.
- The new tax regime will be made the default tax regime, and the old benefits will also continue.
- The new tax structure will be changed to make the basic exemption to up to 3 lakh rupees.
“Salaried class and pensioners including Family pensioners for whom I propose to extend the Benefit of Standard deduction to the new tax regime Each salaried person with an income of Rs 15.5 lakhs or more to benefit by Rs 52,500,” added the minister. She further went on to add: “I propose to change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to 3 lakhs.”
New Personal Income Tax Rates
According to the announcements made in the Budget 2023, the new income tax rates are as follows:
- Rs 0-3 Lakhs – Nil.
- Rs 3-6 Lakhs – 5%.
- Rs 6-9 Lakhs – 10%.
- Rs 9-12 Lakhs – 15%.
- Rs 12-15 Lakhs – 20%.
- Above Rs 15 Lakhs – 30%.
“Tax reform makes complete sense considering the inflation. It’ll increase the disposable income in the hands of the Indian workforce; and push the demand in the market. It’ll make India stronger to have an accelerated growth,” said Sumit Sabharwal, CEO of TeamLease HRtech on the tax announcements. “Tax rebates will boost consumption from the salaried professional. It’ll ultimately push the demand in the market. A higher disposable income will ensure that the Indian salaried class can keep improving their living standard. It’ll be overall beneficial for the employee without putting any extra burden on the employers,” he added.
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