Tax Exemption under New Tax regime: In the financial year 2023-24, after many years, the government has given direct exemption regarding income tax slab. Taxpayers whose annual income is less than Rs 7 lakh can save tax on their entire income in the new tax regime.
Tax Exemption Limit : To make the new tax regime attractive, the government has increased the tax exemption limit up to Rs 7 lakh. It is a matter of great relief for the 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 I tell you that this range is not 7, but 7.5 lakh rupees, then it will not be believed.
In the financial year 2023-24, the government has given direct exemption regarding income tax slab after many years. Although the new tax regime has been implemented two years ago, but in true sense its days are now over. In the budget, it has been announced to implement the new tax regime by default. Till now the old tax regime was implemented by default. This means that now you do not tell your HR which regime to choose, then by default your income tax calculation will start with the new regime. If you want to pay tax from the old regime, you must first inform your employer.
Who will get the 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 5 lakh rupees. The confusion is that if the income of Rs 7 lakh is made tax free, then how much tax will have to be paid by those earning Rs 7.5 lakh. The government increased the tax rebate limit from Rs 5 lakh to Rs 7 lakh and also gave a standard deduction of Rs 50,000. In this way, the total income up to Rs 7.5 lakh became tax free.
If earning is more than 7.5 lakh
If someone’s annual income is more than Rs 7.5 lakh and is adopting the option of savings, then he should stay away from the new tax regime. Actually, in the old regime, tax exemption is given only up to 5 lakhs. Tax has to be saved in the form of investment on income more than this. Those who are not able to invest in rising inflation, they should adopt the new regime. In this, even after taking tax exemption of 7.5 lakhs, if your income is more, then the tax rate will be less on it. Apart from this, tax up to 3 lakh has been kept nil in the new regime, due to which you will be able to save several thousand in the form of tax.
