4 min read
Updated on Mar 14, 2023
The union budget 2023-24, announced recently, highlighted some developments in the New Tax Regime, while no specific changes were announced for the old tax regime. As per the latest budget announcements, lower tax rates and a tax rebate has been extended on income up to INR 7 lakh under the new tax regime.
Also Read: Union Budget 2023-24: What it Holds for the Insurance Sector?
|Income Slab||Income Tax Rate|
|Up to INR 3,00,000||Nil|
|INR 3,00,000 – INR 6,00,000||5%|
|INR 6,00,000 – INR 9,00,000||10%|
|INR 9,00,000 – INR 12,00,000||15%|
|INR 12,00,000 – INR 15,00,000||20%|
|INR 15,00,000 and above||30%|
|Income Slab||Income Tax Rate|
|Up to INR 2,50,000||Nil|
|INR 2,50,001 – INR 5,00,000||5%|
|INR 5,00,001- INR 10,00,000||20%|
|INR 10,00,000 and above||30%|
The rebate limit for individual taxpayers has been increased from INR 5 lakh to INR 7 lakh per annum. So, the taxpayers who were getting tax exemptions on income up to INR 5 lakh will now receive the rebate on an amount up to INR 7 lakh under the new tax regime. Hence, taxpayers can stay away from paying tax for up to INR 7 lakh under the new tax regime.
Further, the budget 2023 announced the scrapping of the old twin-structure introduced in 2020. As per the new structure, the number of tax slabs have been reduced and exemption limit has been increased to INR 3 lakh.
Further, in the last union budget 2020, individual taxpayers were given the option to choose the old tax rate, which allowed them to claim exemption on tax. Alternatively, they were given the option to select the reduced new tax slab with no option of tax benefits. Further, as per the 2020 budget, taxpayers under the old tax regime could receive a 30% tax rate (with INR 15 lakh annual income). However, they had the option to claim exemptions. On the other hand, taxpayers opting for the new tax slab in 2020 received a 25 % tax rate (with INR 15 lakh annual income). However, they didn’t get the option to claim exemptions.
Read More: Income Tax Slabs: Income Tax Slabs Old Regime for Individual, Senior Citizens and Super Seniors FY 2022-23
So, let’s check with an example how much savings can be enjoyed by a taxpayer under the Union Budget 2023 Income Tax – new tax regime. Since no change has been made in the old tax regime, it remains unchanged.
For individuals with a salary up to INR 7 lakh/annum are not required to pay any tax. Earlier, this tax deduction was up to INR 5 lakh/annum.
Now, if you earn INR 9 lakh salary per annum, there are two ways in which your income can be taxed.
The rest of the balance that is INR 6 lakh can be taxed under two slabs
INR 3 lakh to 6 lakh at 5 %, and
INR 6 lakh to 9 lakh at 10 %
Rest of the balance: INR 3 lakh to be taxed under one slab i.e. INR 6-9 lakh slab at 10 %
Thus, the total tax levied on INR 9 lakh would be the sum of 1, 2, and 3, which will be around INR 45,000, which a taxpayer has to pay as per the new tax regime.
On the other hand, in the case of the old tax regime, if you earn INR 9 lakh/year, the taxpayer might have to pay around INR 60,000 as tax.
It entirely depends on the discretion of the taxpayer to choose the new or old tax regime as per their convenience and benefits. All you need is to spare some time to understand both the tax slabs and the difference between the new and old tax regime. This will help you to decide which one would suit your particular needs.
Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.
View this post on Instagram
As per the new budget announced, changes were declared in income tax slabs with up to INR 7 lakh rebate under new income tax regime.
It actually would depend on various things including the salary of an individual to decide the tax slab - new tax regime or old tax regime – to pick and which one would suit them better. Opting for the new tax regime may result in lower taxes, however, many other aspects are there that a taxpayer must consider before opting for a particular tax slab.
Up to INR 3,00,000 – Nil
INR 3,00,000 – INR 6,00,000 - 5%
INR 6,00,000 – INR 9,00,000 - 10%
INR 9,00,000 – INR 12,00,000 - 15%
INR 12,00,000 - INR 15,00,000 - 20%
INR 15,00,000 and above - 30%
No changes have been made in the old tax regime under the recent budget announcement 2023-24.
As per the latest budget announcement by Finance minister Nirmala Sitharaman, no announcement has been made regarding changes to the section 80C limit of the Income-tax Act, 1961.
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
India’s growing economy is attracting huge recognition globally, which is why FDI or Foreign Direct Investments are getting attracted too. Hence, the NRI or Non-Resident.
When it comes to investing in FDs, Indian consumers commonly prefer to invest in SBI Fixed Deposit (FD) schemes due to the high interest rates.
HDFC bank Fixed Deposit (FD) is termed as one of the most popular schemes of investment offering good and assured returns. Let us discuss the.
Kisan Vikas Patra commonly known as KVP is an attractive investment option known for its high interest rates and risk-free savings option. Let us discuss.
Senior Citizen Savings Scheme (SCSS) commonly known as SCSS is a government backed savings option for elderly citizens of India. Let us understand this well-designed.
Fixed deposit (FD) is an investment option that allows an investor to invest funds for a fixed tenure to earn good returns at fixed rate.
The best thing about investing in a Fixed Deposit is that it is a risk-free product that helps investors to earn good returns. You can.
Have you ever come across a situation where your family members started convincing you to open an RD account since you are financially independent now?.
Fixed Deposit (FD) is a secured investment option that allows the investor to gain guaranteed returns. However, there are occasions you may have to withdraw.
If you want to calculate the income tax to be paid on your salary, you have to understand the tax laws and tax jargon. This.
Speak to our advisor
Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2023 Mahindra Insurance Brokers. All Right Reserved.