Union Budget 2023: Big relief has been announced for taxpayers. Under the new income tax regime, no tax will have to be paid on income up to Rs 7 lakh, which was Rs 5 lakh until now. Finance Minister Nirmala Sitharaman has greatly relieved taxpayers under the new tax regime. Under the new income tax regime, the tax exemption limit has been raised to Rs 7 lakh.
New Tax Slab Of New Tax Regime
The remarkable thing is to keep in mind that those whose income is up to Rs 7 lakh will not have to pay even a single rupee tax, but if their income increases by even one rupee from 7 lacks, then they will have to pay tax and that tax amount is only one rupee. Not on, but will have to be given on the income above three lakhs.
Those with more than seven lakhs will not have to pay any tax on income up to Rs. 3 lakhs under the new income tax system. But if the payment goes above seven lakhs, 5% tax will have to be paid in the slab of 3 to 6 lakhs. Similarly, 10 per cent income tax on the slab of Rs 6 to 9 lakh, 15 per cent on the slab of Rs 9 to 12 lakh, 20 per cent on the slab of Rs 12 to 15 lakh and 30 per cent on income above Rs 15 lakh.
| Income Tax Slabs Under New Tax Regime | Income Tax Rates Under New Tax Regime |
| O to Rs 3 lakh | 0 |
| Rs 3 lakh to Rs 6 lakh | 5% |
| Rs 6 lakh to Rs 9 lakh | 10% |
| Rs 9 lakh to Rs 12 lakh | 15% |
| Rs 12 lakh to Rs 15 lakh | 20% |
| Income above Rs 15 lakh | 30% |
In the new income tax regime, no tax has to be paid on income up to Rs 2.5 lakh. Income from Rs 2.50 to Rs 5 lakh is taxed at 5 per cent, in which a rebate is provided under 87A. Ten per cent on income between Rs 5 to 7.50 lakh, 15 per cent on income between 7.50 and 10 lacks, 20 per cent on income between 10 and 12.50 lakh, 25 per cent on income between 12.5 and 15 lacks and above Rs 15 lakh. 30% tax has to be paid on the payment.
Taxpayers Were Reluctant About The New Tax Regime
In the new income tax regime, those earning up to Rs 2.5 lakh annually do not have to pay any tax, but in the old tax regime, those earning up to Rs 7.5 lakh are saved from paying tax. Most people fall into this category, so there is no incentive to opt for the new income tax regime.
Even though the tax rates may be lower in the new income tax system, due to not getting the benefit of standard deduction apart from tax exemption on home loan principal or interest or savings, the new system was not appealing to taxpayers. In the assessment year 2021-22, less than 5 percent of taxpayers filed income tax returns under the new tax system. This is why the Finance Minister has made significant changes in the tax slabs to make the new income tax regime attractive.
