Union Budget 2023 in India: Income tax slabs changed under the new regime. The annual refund cap for individual taxpayers has been raised from ₹ 5 lahks to ₹ 7 lakh rupees by the Indian finance minister, Nirmala Sitharaman.
“..Currently, those with income up to ₹ 5 lahks do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to ₹ 7 lahks in the new tax regime. Thus, persons in the new tax regime, with income up to ₹ 7 lahks will not have to pay any tax,” Ms. Sitharaman said while presenting Budget 2023 in parliament today.
She also announced new tax brackets and got rid of the outdated twin-structure system, which taxed people under 25% without exemptions and under 30% with exemptions.
The new slabs are:
Rs 0-3 lakh – no tax
Rs 3-6 lakh – taxed at 5 per cent
Rs 6-9 lakh – taxed at 10 per cent
Rs 9-12 lakh – taxed at 15 per cent
Rs 12-15 lakh- taxed at 20 per cent
Above ₹ 15 lakh – taxed at 30 per cent
“I had introduced, in the year 2020, the new personal income tax regime with six income slabs starting from ₹ 2.5 lakh. 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 lakh,” Ms. Sitharaman said.
Union Budget 2023 in India: Income tax slabs changed under the new regime. Individual taxpayers were given the choice in Budget 2020 by the Finance Minister to either stay at the previous rate, under which they could still claim tax exemptions or choose the lower new rate, which excluded the possibility of claiming exemptions.
For those whose income was over ₹ 15 lakh rupees per year, the former tax system imposed a 30% tax rate, however, they were eligible for exemptions.
Those who chose the new system, which was first announced in 2020, and had an income over ₹ 15 lakh were subject to a 25% tax rate, however, they were not eligible for exemptions.
