Flashback 2023: The biggest beneficiaries of this announcement of Modi government have been the salaried class and pensioners. Their tax liability has reduced under the new regime.
Year Ender 2023: The year 2023 has been full of better relief for the taxpayers. While presenting the 10th full budget of the Modi government on February 1, 2023, Finance Minister Nirmala Sitharaman took a big decision to make the new income tax regime brought in the year 2020 attractive. Under the new income tax regime, the Finance Minister announced that those whose annual taxable income is Rs 7 lakh will not have to pay tax, which was earlier Rs 5 lakh.
New tax regime made attractive
Under the new income tax system, the tax exemption limit has been increased to Rs 7 lakh. Those with income up to Rs 7 lakh will not have to pay even a single rupee tax. In the new tax regime, it was decided to also give the benefit of standard deduction to the taxpayers. In Budget 2023, the Finance Minister announced that salaried and pensioners will get the benefit of standard deduction of Rs 50,000. That means if someone’s income is Rs 7.50 lakh then he will not have to pay any tax. But taxpayers who are not salaried or pensioners will not get this benefit.
Big benefit to salaried class pensioners
The biggest benefit of this announcement of Modi government has been to the salaried class and pensioners. Later, the Finance Minister corrected his announcement and said that those with taxable income of Rs 7.27 lakh annually will not have to pay income tax. However, those whose annual taxable income is more than Rs 7.27 lakh will have to pay tax on the entire income above Rs 3 lakh.
No tax on income up to Rs 7.27 lakh
Under the new income tax regime, tax exemption is available on income of Rs 3 lakh. But 5% on income up to Rs 3-6 lakh, 10% on income of Rs 6-9 lakh, 15% on income of Rs 9-12 lakh, 20% on income of Rs 12-15 lakh and above Rs 15 lakh A provision was made to pay 30 percent tax on income. But those whose taxable income is Rs 7.27 lakh will not have to pay any tax during the financial year 2023-24 if they choose the new tax regime. The government is giving rebate on the tax of Rs 25,000.
ITR will have to be filed under the new regime in AY25
The new tax regime has been made the default. Investors who have to file income tax returns under the old tax regime will have to choose the old regime at the time of filing income tax returns. When taxpayers file returns under the assessment year 2024-25, they will have to choose the new income tax regime.
