How taxes are calculated on salary above ₹7 lakh in new regime? A quick view
05 Feb 2023
Zinkpot
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Mint - One of the biggest limelight of the Budget 2023 is none other than personal income tax slabs which have been modified further and are likely to boost consumption demand. Experts welcomed the revised new income tax slab with open arms. However, the government has not done away with the old tax regime. But now, taxpayers have the option to pay their taxes in either of the two regimes. For a layperson, it is firstly important to understand how your taxes are calculated in the new regime. Read more
The central government on Wednesday made a much awaited mega announcement on increasing the income level up to which no income tax is paid - ₹7 lakh a year from the 2023-24 financial year. It was ₹5 lakh so far. But there is a catch: This change is only for those who choose the New Tax Regime.
A five-slab structure will apply now under the new regime, also raising the no tax slab by ₹50,000. Income between ₹0-3,lakh will have no tax; it was ₹0.2.5 lakh earlier.
From then on:
Income part from ₹3-6 lakh will be taxed at 5 percent;
₹6-9 lakh at 10 percent;
₹9-12 lakh at 15 percent;
₹12-15 lakh will attract a 20% tax;
The part of income going above ₹15 lakh will be taxed at 30%.
After listing out the slabs, the Minister also announced at the old regime, which has higher tax rates but several exemptions will only be available on request now and the new regime will thus be considered the default system for everyone.
She did add a benefit to the new scheme. Now salaried people with income ₹15.5 lakh or more can subtract ₹52,500 as Standard Deduction while calculating their taxable income.
She brought down the highest applicable tax rate from 42.74% to 39%.
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