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Budget 2023 Income Tax Slabs Explained: New tax regime vs Existing new tax regime vs Old tax regime



New income tax regime compare to Old income tax regime: Finance Minister Nirmala Sitharaman has improved the new system Income Tax new modes and announcements income tax sheet for the year 2023 – 2024. The total number of income tax rates under the new tax regime has been reduced to five instead of six and the tax tables have also been revised. In a great joy for salaried taxpayers, the standard deduction has also been included in the new tax regime. In addition, the discount limit has been increased to Rs 7 lakh instead of Rs 50,000. This means that if a salaried individual earns up to Rs 7 lakh, he will not have to pay any income tax.
So which income tax regime should you choose? The table below analyzes income tax costs under the current ordinary income tax regime, the current preferential income tax regime and the new income tax regime announced by FM Sitharaman in budget 2023:

Salary income before any deductions/exemptions current mode New mode available Recommend new mode
5,00,000 won
5,50,000 won 18,200
6,00,000 won 23,400
7,00,000 won 33,800
7,50,000 won 23,400 39,000 won
10,00,000 75,400 78,000 won 54,600
15.000.000 2,10,660 1.95,000 won 1.45,600
30,00,000 6,78,600 6,63,000 won 6.08,400
70,00,000 21,19,260 21,02,100 20,42,040
1,50,00,000 50,85,990 50,68,050 50.05,260
6,00,00,000 2,52,93,762 2.52.72,390 2,29,90,500

Assumption: EY has considered deductions and exemptions totaling Rs 2,00,000 (including standard deductions) for the purposes of the above table under the applicable tax regime. The above table is for resident individuals under 60 years of age. Now, by default, the standard deduction of Rs 50,000 is applied under the proposed new scheme (similar to the current tax regime).
As can be clearly seen from the table above, if you are exempt from tax up to Rs 2 lakh including standard deduction, then the new income tax tables under the new income tax regime will make more sense to choose.

What are the new income tax tables for 2023 to 2024 under the new tax regime?

  • Earn up to Rs 3 lakh with 0% tax or NIL
  • From Rs 3 lakh to Rs 6 lakh the tax rate is 5%
  • From Rs 6 lakh to Rs 9 lakh the tax rate is 10%
  • From Rs 9 lakh to Rs 12 lakh, the tax rate is 15%
  • From Rs 12 lakh to Rs 15 lakh the tax rate is 20%
  • Above Rs 15 lakh, the tax rate is 30%

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