Tax Exemption under New Tax regime: The government has given direct exemption regarding income tax slabs in the financial year 2023-24 after many years. Taxpayers whose annual income is less than Rs 7 lakh can save tax on their entire income in the new tax regime. which
To make the new tax regime attractive, the government has increased the scope of tax exemption up to Rs 7 lakh. It is a matter of great relief for employed and middle class people. Those whose annual income is less than Rs 7 lakh can save tax on their entire income in this regime. But, if we tell you that this range is not Rs 7 but Rs 7.5 lakh, then you will not believe it.
After many years, the government has given direct relaxation regarding income tax slab in the financial year 2023-24. Although the new tax regime has been implemented two years ago, in the true sense its days are over. In the budget, it has been announced that the new tax regime will be implemented by default. Till now the old tax regime was applied by default. This means that now if you do not tell your HR which regime to choose, then by default your income tax calculation will start using the new regime. If you want to pay tax under the old regime, you will have to inform your employer first.
Who will benefit?
When the Finance Minister gave information on personal tax during the budget speech, he made income tax free up to Rs 7 lakh in the new tax regime. Earlier this limit was Rs 5 lakh. The confusion is that if income of Rs 7 lakh is made tax free, then how much tax will those with a salary of Rs 7.5 lakh have to pay. The government increased the tax rebate limit from Rs 5 lakh to Rs 7 lakh and also gave a standard deduction of Rs 50 thousand. In this way, total income up to Rs 7.5 lakh became tax free.
If the earning is more than Rs 7.5 lakh
If someone’s annual income is more than Rs 7.5 lakh and is adopting savings options, then he should stay away from the new tax regime. Actually, in the old regime, tax exemption is given only up to Rs 5 lakh. On income more than this, tax has to be saved in the form of investment. Those who are unable to invest due to rising inflation should adopt the new regime. In this, even after taking tax exemption of Rs 7.5 lakh, if your income is more then the tax rate on it will be less. Apart from this, tax up to Rs 3 lakh has been kept nil in the new regime, due to which you will save several thousand in tax.
