Union Finance Minister Nirmala Sitharaman, while presenting Budget for 2023-24, announced income tax cuts and also introduced new income tax slabs in a move to provide relief to middle class.
Now, individuals with a taxable income of Rs 7 lakh under the new tax regime will not have to pay any income tax. Earlier, this limit was Rs 5 lakh.
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The government has also announced five slabs with new tax rates for the new regime, as follows:
Rs 0-3 lakh: Nil tax
Rs 3-6 lakh: 5 per cent
Rs 6- 9 lakh: 10 per cent
Rs 9-12 lakh: 15 per cent
Rs 12-15 lakh: 20 per cent
Highest tax rate of 30 per cent on income above Rs 15 lakh.
Accordingly, those with a taxable income of Rs 9 lakh will now have to pay a tax of Rs 45,000 as against Rs 60,000 earlier, and an individual with a tax of taxable salary of Rs 15 lakh will now have to pay a tax of Rs 1.5 lakh as against Rs 1,87,500, a reduction of 20 per cent.
The highest tax rate of 42.7 per cent has also been reduced in this budget. The surcharge of 37 per cent has been reduced to 25 per cent, the finance minister said.
She also announced that the new tax regime will be the default tax system, but tax payers can still continue with the old tax regime.