New Delhi: In a bid to simplify the tax structure and encourage the adoption of the new tax regime introduced in Budget 2020, the government has made significant changes in the recent Budget 2023. However, these changes have left taxpayers in a quandary, unsure whether to stick to the familiar old tax regime or embrace the altered landscape of the new regime.
Understanding New Tax Regime:
The new tax regime, initially met with a lukewarm response due to reduced exemptions and deductions, has undergone key modifications to make it more appealing. (Also Read: Home Loan Benefits For Women In India: Check What Advantage They Can Avail)
One notable change is the increased tax rebate limit, allowing individuals with an income up to Rs 7 lakhs to enjoy a full tax rebate. This is a substantial enhancement compared to the previous threshold of Rs 5 lakhs under the old tax regime. (Also Read: Forgot To Take Medicines? Don’t Worry, Your Android Phone May Come Handy: Here’s How)
Additionally, the tax slabs have been streamlined, with an increased exemption limit of Rs 3 lakhs. The tax rates for different income slabs under the old and new tax regimes are as follows:
– For income between Rs 0 and Rs 2,50,000, there is no tax in both the old and new tax regimes.
– In the income range of Rs 2,50,000 to Rs 3,00,000, the tax rate is 5 percent in both the old and new regimes until March 31, 2023. From April 1, 2023, it remains the same in the new regime.
– For income between Rs 3,00,000 and Rs 5,00,000, the tax rate is 5 percent in both old and new regimes until March 31, 2023. From April 1, 2023, it continues to be 5 percent in the new regime.
– If the income falls between Rs 5,00,000 and Rs 6,00,000, the tax rate is 20 percent in the old regime, 10 percent in the new regime until March 31, 2023, and 5 percent from April 1, 2023, in the new regime.
– For income from Rs 6,00,000 to Rs 7,50,000, the tax rate is 20 percent in the old regime, 10 percent until March 31, 2023, and 10 percent from April 1, 2023, in the new regime.
– In the income range of Rs 7,50,000 to Rs 9,00,000, the tax rate is 20 percent in the old regime, 15 percent until March 31, 2023, and 10 percent from April 1, 2023, in the new regime.
– For income between Rs 9,00,000 and Rs 10,00,000, the tax rate is 20 percent in the old regime, 15 percent until March 31, 2023, and 15 percent from April 1, 2023, in the new regime.
– In the income bracket of Rs 10,00,000 to Rs 12,00,000, the tax rate is 30 percent in the old regime, 20 percent until March 31, 2023, and 15 percent from April 1, 2023, in the new regime.
– For income ranging from Rs 12,00,000 to Rs 12,50,000, the tax rate is 30 percent in the old regime, 20 percent until March 31, 2023, and 20 percent from April 1, 2023, in the new regime.
– If the income is between Rs 12,50,000 and Rs 15,00,000, the tax rate is 30 percent in the old regime, 25 percent until March 31, 2023, and 20 percent from April 1, 2023, in the new regime.
– For income exceeding Rs 15,00,000, the tax rate is 30 percent in both the old and new tax regimes.