New tax regime 2023

Old vs New Income Tax Regime: Hit hard by the high inflation and the rising cost of living, there were expectations galore from the Union Budget 2023. Taxpayers and the common man were looking towards Finance Minister Nirmala Sitharaman with much hope as they expected her to do something for them, particularly for reducing their tax burden. Increase in the section 80C deduction limit from Rs 1.5 lakh to at least Rs 2 lakh, increase in the basic income tax exemption limit to Rs 5 lakh, more tax sops for homebuyers and investors etc were among the key expectations of taxpayers. Taxpayers were also expecting some changes in the New Tax Regime to make it more attractive. ( Also Check: Income Tax Slab 2020-21: Old tax regime or new one – which is more beneficial? For instance, the number of tax slabs in the new tax regime has been proposed to be reduced from 6 to 5, while the tax exemption limit has been increased to Rs 3 lakh. The rebate limit in the new tax regime has also been increased to Rs 7 lakh from Rs 5 lakh earlier, and the benefit of standard deduction has been extended to it. However, no tax sops have been announced for the taxpayers under the old tax regime. This means no increase in the 80C deduction limit, no increase in the basic exemption limit, and almost no tax sops for homebuyers and investors. This has left the taxpayers under the old tax regime highly disappointed as there is no incentive for them to save or spend more, nor their tax burden has reduced at ...

New Tax Regime Calculator 2023-24 (Online): Finance Minister Nirmala Sitharaman proposed to reduce the number of tax slabs under the clutter-free New Tax Regime from six to five. The revised tax slabs under the new regime will be applicable for Assessment Year (AY) 2024-25 or for the income made in FY 2023-24. For income in FY 2022-23 (AY 2023-24), you will have to file Income Tax Return as per the old tax slabs. As per the latest tax slabs under the New Regime, individuals having an annual income of Rs 5-6 lakh will have to pay 5% tax while those earning Rs 6-9 lakh will have to pay 10% of their income as tax. Further, individuals earning Rs 9-12 lakh per year will pay 15% tax while those earning Rs 12-15 lakh annually will pay 20% tax. The tax rate for individuals earning more than Rs 15 lakh will pay 30% tax. Income Tax Return (ITR) filing online for Assessment Year (2023-24 with .Json files: Check steps Interestingly, the Finance Minister has made annual income up to Rs 7 lakh tax-free by increasing the rebate limit. But what about those earning Rs 7.5 lakh or Rs 8.5 lakh per year? You can calculate your tax liability in the New Tax Regime Calculator FY 2023-24 (AY 2024-25) The following chart prepared by Dr Suresh Surana, Founder of RSM India, will also help: Individual Tax on Income under New Tax Regime for FY 2023-24 (AY 2024-25) Income Level Basic Surcharge Cess Tax Liability 2,50,000 3,00,000 5,00,000 6,00,000 – – – 7,00,000 – – – – 7,50,000 30,000 – 1,200 31,200 ...

• Section 80C: This is the most commonly availed deduction by individuals. Investments made in Employees’ Provident Fund, Life insurance premium paid, Public Provident Fund, principal home loan repayment etc. are part of this deduction. The maximum amount available under section 80C is 1.5 lakh in a financial year. • Section 80CCD (1b): This deduction is available for investment made in the NPS account. The maximum deduction that can be claimed under this section is Rs 50,000. • Section 80D: This deduction is available for premium paid on medical insurance policy. An individual can claim maximum deduction of Rs 25,000 for insurance premium paid for self, spouse and dependent children. For senior citizens, the maximum deduction is Rs 50,000. • The leave travel allowance (LTA) exemption, which salaried employees can currently take advantage of twice every four years. • House rent allowance (HRA), which is typically paid to employees as part of their pay. If the person was residing in rented housing, this might be claimed as tax-exempt up to specific defined limits. • Deduction available under section 80TTA/80TTB will not be available to the taxpayers. • Deduction for entertainment allowance (for government employees) and employment/professional tax as contained in section 16. • Tax deduction for interest paid on housing loan: As the property was self-occupied or vacant, interest paid on a housing loan for such a property might be deducted from income from house property resu...

Finance Minister Nirmala Sitharaman on Wednesday announced that the New Tax regime will be the default tax system. The income taxpayers now have to opt for the old regime. The announcement was made during her Budget 2023 speech. FM Sitharaman also proposed to increase the income tax rebate limit to Rs 7 lakh under the new tax regime. Sitharaman proposed increasing the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime, meaning individuals who opt for the new regime will not be taxed on annual income up to Rs 7 lakh. In the new personal income tax regime, introduced in 2020, the tax slab structure has been changed as well. Finance Minister announced the reduction of the number of slabs to five and the tax exemption limit has also been increased to 3 lakhs. Budget 2023 Tax Slabs Announced 0-3 lakh: Nil 3-6 lakh: 5% 6-9 lakh: 10% 9-12 lakh: 15% 12-15 lakh: 20% Above 15 Lakh: 30% At present, salaried individuals have the choice to either stick with the traditional tax regime and avail common deductions and exemptions or switch to the new income tax regime with fewer deductions and exemptions. Under the new tax regime, individuals must forego 70 tax deductions and exemptions, including HRA and LTA exemptions and the Section 80C deduction of up to INR 1.5 lakh. In 2020, a simpler tax regime for individuals, without exemptions or deductions, was introduced through Section 115BAC. This was designed to benefit individuals who were unable to make investments and claim de...

The So what are the exemptions under new tax regime? New Tax Regime Exemption List (FY 2023-24) The following deductions under New Tax Regime are still available for tax payers: • The • The deduction for employer’s contribution made towards employee’s NPS account under Section 80CCD(2). The maximum deduction that an employee can claim under this varies for private and government employees. A private sector employee can claim a maximum deduction of 10% of their salary. This figures changes to 14% for the government employees. So if you are a private sector employee with basic salary of Rs 16 lakh per annum and your employer is contributing Rs 2 lakh every year to the employee’s NPS account, then as per section 80CCD (2), the employee is eligible to claim only Rs 1.6 lakh (10% of Rs 16 lakh) as deduction. Read more about • In general, the employers’ contributions to their employee’s EPF and NPS and superannuation accounts are also applicable for tax exemption. However, for that, the contributions made in a year to all the employee accounts should not be above a maximum limit of Rs 7.5 lakh to qualify for the tax exemption. There are a few more not-so-obvious deductions that can be claimed under the new tax regime by all the taxpayers for whom these are applicable. These deductions are: • A deduction of Rs 15,000 is allowed from the family pension as deduction under the new tax regime. • Gratuity payment of up to Rs 20 lakh for private sector and employee and the entire gratu...

Finance Minister Nirmala Sitharaman on Wednesday announced that the New Tax regime will be the default tax system. The income taxpayers now have to opt for the old regime. The announcement was made during her Budget 2023 speech. FM Sitharaman also proposed to increase the income tax rebate limit to Rs 7 lakh under the new tax regime. Sitharaman proposed increasing the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime, meaning individuals who opt for the new regime will not be taxed on annual income up to Rs 7 lakh. In the new personal income tax regime, introduced in 2020, the tax slab structure has been changed as well. Finance Minister announced the reduction of the number of slabs to five and the tax exemption limit has also been increased to 3 lakhs. Budget 2023 Tax Slabs Announced 0-3 lakh: Nil 3-6 lakh: 5% 6-9 lakh: 10% 9-12 lakh: 15% 12-15 lakh: 20% Above 15 Lakh: 30% At present, salaried individuals have the choice to either stick with the traditional tax regime and avail common deductions and exemptions or switch to the new income tax regime with fewer deductions and exemptions. Under the new tax regime, individuals must forego 70 tax deductions and exemptions, including HRA and LTA exemptions and the Section 80C deduction of up to INR 1.5 lakh. In 2020, a simpler tax regime for individuals, without exemptions or deductions, was introduced through Section 115BAC. This was designed to benefit individuals who were unable to make investments and claim de...

• Section 80C: This is the most commonly availed deduction by individuals. Investments made in Employees’ Provident Fund, Life insurance premium paid, Public Provident Fund, principal home loan repayment etc. are part of this deduction. The maximum amount available under section 80C is 1.5 lakh in a financial year. • Section 80CCD (1b): This deduction is available for investment made in the NPS account. The maximum deduction that can be claimed under this section is Rs 50,000. • Section 80D: This deduction is available for premium paid on medical insurance policy. An individual can claim maximum deduction of Rs 25,000 for insurance premium paid for self, spouse and dependent children. For senior citizens, the maximum deduction is Rs 50,000. • The leave travel allowance (LTA) exemption, which salaried employees can currently take advantage of twice every four years. • House rent allowance (HRA), which is typically paid to employees as part of their pay. If the person was residing in rented housing, this might be claimed as tax-exempt up to specific defined limits. • Deduction available under section 80TTA/80TTB will not be available to the taxpayers. • Deduction for entertainment allowance (for government employees) and employment/professional tax as contained in section 16. • Tax deduction for interest paid on housing loan: As the property was self-occupied or vacant, interest paid on a housing loan for such a property might be deducted from income from house property resu...

New Tax Regime Calculator 2023-24 (Online): Finance Minister Nirmala Sitharaman proposed to reduce the number of tax slabs under the clutter-free New Tax Regime from six to five. The revised tax slabs under the new regime will be applicable for Assessment Year (AY) 2024-25 or for the income made in FY 2023-24. For income in FY 2022-23 (AY 2023-24), you will have to file Income Tax Return as per the old tax slabs. As per the latest tax slabs under the New Regime, individuals having an annual income of Rs 5-6 lakh will have to pay 5% tax while those earning Rs 6-9 lakh will have to pay 10% of their income as tax. Further, individuals earning Rs 9-12 lakh per year will pay 15% tax while those earning Rs 12-15 lakh annually will pay 20% tax. The tax rate for individuals earning more than Rs 15 lakh will pay 30% tax. Income Tax Return (ITR) filing online for Assessment Year (2023-24 with .Json files: Check steps Interestingly, the Finance Minister has made annual income up to Rs 7 lakh tax-free by increasing the rebate limit. But what about those earning Rs 7.5 lakh or Rs 8.5 lakh per year? You can calculate your tax liability in the New Tax Regime Calculator FY 2023-24 (AY 2024-25) The following chart prepared by Dr Suresh Surana, Founder of RSM India, will also help: Individual Tax on Income under New Tax Regime for FY 2023-24 (AY 2024-25) Income Level Basic Surcharge Cess Tax Liability 2,50,000 3,00,000 5,00,000 6,00,000 – – – 7,00,000 – – – – 7,50,000 30,000 – 1,200 31,200 ...

The So what are the exemptions under new tax regime? New Tax Regime Exemption List (FY 2023-24) The following deductions under New Tax Regime are still available for tax payers: • The • The deduction for employer’s contribution made towards employee’s NPS account under Section 80CCD(2). The maximum deduction that an employee can claim under this varies for private and government employees. A private sector employee can claim a maximum deduction of 10% of their salary. This figures changes to 14% for the government employees. So if you are a private sector employee with basic salary of Rs 16 lakh per annum and your employer is contributing Rs 2 lakh every year to the employee’s NPS account, then as per section 80CCD (2), the employee is eligible to claim only Rs 1.6 lakh (10% of Rs 16 lakh) as deduction. Read more about • In general, the employers’ contributions to their employee’s EPF and NPS and superannuation accounts are also applicable for tax exemption. However, for that, the contributions made in a year to all the employee accounts should not be above a maximum limit of Rs 7.5 lakh to qualify for the tax exemption. There are a few more not-so-obvious deductions that can be claimed under the new tax regime by all the taxpayers for whom these are applicable. These deductions are: • A deduction of Rs 15,000 is allowed from the family pension as deduction under the new tax regime. • Gratuity payment of up to Rs 20 lakh for private sector and employee and the entire gratu...

Old vs New Income Tax Regime: Hit hard by the high inflation and the rising cost of living, there were expectations galore from the Union Budget 2023. Taxpayers and the common man were looking towards Finance Minister Nirmala Sitharaman with much hope as they expected her to do something for them, particularly for reducing their tax burden. Increase in the section 80C deduction limit from Rs 1.5 lakh to at least Rs 2 lakh, increase in the basic income tax exemption limit to Rs 5 lakh, more tax sops for homebuyers and investors etc were among the key expectations of taxpayers. Taxpayers were also expecting some changes in the New Tax Regime to make it more attractive. ( Also Check: Income Tax Slab 2020-21: Old tax regime or new one – which is more beneficial? For instance, the number of tax slabs in the new tax regime has been proposed to be reduced from 6 to 5, while the tax exemption limit has been increased to Rs 3 lakh. The rebate limit in the new tax regime has also been increased to Rs 7 lakh from Rs 5 lakh earlier, and the benefit of standard deduction has been extended to it. However, no tax sops have been announced for the taxpayers under the old tax regime. This means no increase in the 80C deduction limit, no increase in the basic exemption limit, and almost no tax sops for homebuyers and investors. This has left the taxpayers under the old tax regime highly disappointed as there is no incentive for them to save or spend more, nor their tax burden has reduced at ...