The Indian Union Finance Minister Nirmala Sitharaman made a big announcement in the recent budget speech, proposing several changes in the income tax structure and increasing the upper limit of taxable income.
The new income tax structure will come into effect from the financial year 2023-24, providing relief to taxpayers.
Increase in Upper Limit of Taxable Income The Union Finance Minister has announced that the upper limit of income tax exemption will be increased from 5 lakhs to 7 lakhs.
This move is expected to benefit a large number of taxpayers and provide relief to those who fall under the lower tax bracket.
Reduction in Income Tax Rates
One of the major changes proposed by the Union Finance Minister is the reduction in the number of tax slabs from six to five.
As a result, taxpayers with an income of Rs 9 lakh will see a reduction of 25 percent in their tax liabilities.
The Finance Minister said, “At present, a person with an income of Rs 9 lakh has to pay tax of Rs 60,000 a year. But, in the revised structure, he will have to pay Rs 45,000 in tax.”
Budget 2023: A Comparative Study of Old and New Income Tax Slabs”
The Indian Union Budget 2023, presented by Finance Minister Nirmala Sitharaman, brought several changes to the country’s tax structure. One of the key changes was the introduction of new income tax slabs.
The new tax structure replaces the old tax slab system and offers several benefits to taxpayers. In this article, we will compare the old and new income tax slabs and analyze the impact of the changes on taxpayers.
The Union Finance Minister, Nirmala Sitharaman, has recently announced major changes in the tax structure of India in the budget speech of 2023. The announcement of the new tax regime has been a major surprise for the citizens of India and has been a hot topic of discussion ever since.
The new tax structure has replaced the old tax regime and is aimed at providing tax relief to the common man. In this article, we will discuss the key differences between the old and new tax slabs and the implications of the new tax regime on taxpayers.
New Tax Regime: A Brighter Future for Taxpayers
Under the new tax regime, the upper limit of taxable income has been increased from ₹5 lakhs to ₹7 lakhs, providing tax relief to the taxpayers.
The new tax regime has simplified the tax structure, reducing the number of tax slabs from six to five, and making it easier for taxpayers to understand their tax liability.
The new tax regime is also expected to reduce the tax burden for taxpayers with a taxable income of up to ₹12 lahks.
The new tax slabs are as follows:
- No tax would be levied for income up to ₹3 lakh
- Income between ₹3-6 lakh would be taxed at 5 per cent
- Income between ₹6-9 lakh would be taxed at 10 per cent
- Income between ₹9-12 lakh at 15 per cent
- Income between ₹12-15 lakh at 20 per cent
- Income of ₹15 lakh and above will be taxed at 30 per cent.
Old Tax Regime: A Look Back at the Past
The old tax regime was introduced in 2014 and has remained unchanged since then. The tax slabs under the old tax regime were as follows:
- Income up to ₹2.5 lakh is exempt from taxation
- Income between ₹2.5 to ₹5 lakh is taxed at 5 per cent
- Personal income from ₹5 lakh to ₹7.5 lakh is taxed at 15 per cent
- Income between ₹7.5 lakh to ₹10 lakh is taxed at 20 per cent
- Personal income above ₹10 lakh is taxed at 30 per cent
Comparing the Old and New Tax Regime
The new tax regime has several advantages over the old tax regime. Firstly, the new tax regime has increased the upper limit of taxable income, providing tax relief to taxpayers.
Secondly, the new tax regime has reduced the number of tax slabs from six to five, making it easier for taxpayers to understand their tax liability.
Lastly, the new tax regime is expected to reduce the tax burden for taxpayers with a taxable income of up to ₹12 lakh.
Benefits of the New Income Tax Structure
The new income tax structure is expected to provide significant relief to taxpayers and make the tax system more simple and transparent.
The reduction in tax rates will leave more money in the hands of the taxpayers, enabling them to invest and save more.
The increase in the upper limit of taxable income will also provide relief to those who fall under the lower tax bracket.
Conclusion:
The new income tax structure proposed by the Union Finance Minister Nirmala Sitharaman is a welcome move for taxpayers in India.
The changes proposed in the budget speech will provide relief to a large number of taxpayers and make the tax system more simple and transparent.
Taxpayers can now look forward to having more money in their hands and making better use of it for their personal and financial goals.