Given below are a few important changes proposed in Union Budget 2023, that might affect your Taxes for upcoming year, keep reading to learn more.
BRIEF OF CHANGES IN INCOME TAX LAWS
Revised Tax Slabs w.e.f 01-04-23
Taxable Income | Rate of Tax (%) |
Upto ₹ 3 Lacs | Nil |
₹ 3 Lacs to ₹ 6 Lacs | 5% |
₹ 6 Lacs to ₹ 9 Lacs | 10% |
₹ 9 Lacs to ₹ 12 Lacs | 15% |
₹ 12 Lacs to ₹ 15 Lacs | 20% |
Above ₹ 15 Lacs | 30% |
Although the number of slabs this Budget have reduced, but still it's a lot to remember.
Tip to remember? For every ₹ 3 Lacs increase in Taxable Income there is a corresposnding increase of 5 % in the tax rate.
If we compare, for an Individual Assessee with an Annual Taxable Income of ₹ 15 Lacs, the tax outlay under Old Scheme amounts to ₹ 1,95,000/- (Considering he/she has availed option of claiming deductions by investing under various avenues mentioned in sec 80C, 80D and 80CCD(1B) benefits); Whereas under New Scheme (Alternative Tax Regime) it amounts to ₹1,56,000 /-.
So, for an Individual Assessee having Taxable Income within or equal to ₹15 Lacs alongwith 80C and other benefits, it is advisable to opt for new scheme. For understanding how this budget affects your taxes, do contact your CA.
2. Taxable Income limit for av having Taxable Income within or equal to ₹ 15 Lacs along with sec 80C and other benefits, it is advisable to opt for new scheme. For understanding how this budget affects your taxes, do contact your CA.
3. Benefit of Standard Deduction ( Total ₹ 52,500/-) extended under new scheme to salaried class.
4. New Regime to become the default option.
5. Highest surcharge rate on income above ₹ 5 Crores to be reduced from 37% to 25% under new regime, this essentially means that under old scheme rate of surcharge of 37% remains same. (Old scheme MMR: 42.744% Vs New Scheme MMR: 39%)
6. Increasing tax exemption limit to 25 lakhs on leave encashment on retirement for non-government salaried employees.
7. No tax benefit on new policies w.e.f 01-04-23 having yearly premium more than ₹ 5 Lacs.
8. Few TDS and TCS rates and provision has been changed.
9. Presumptive Taxation Scheme - Limit hiked to ₹ 3 Crores for Small Businesses & ₹ 75 Lacs for Professionals.
10. HNIs prevented from availing exemption u/s 54 & 54F beyond ₹ 10 Crores.
11. Introduction of a unified ITR for all types of persons under Income Tax Act.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
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