Union Budget 2023: New vs Old Tax Regime: See What Has Changed

Union Budget 2023: New and old tax regimes - See what's changed

Budget 2023: New income tax table announced

New Delhi:

Finance Minister Nirmala Sitharaman has increased the refund limit for individual taxpayers from Rs 50,000 to Rs 70,000 a year.

“..Currently, people with income up to Rs 50,000 don’t have to pay any income tax in both the old and new tax regime. I propose to increase the discount limit to Rs 7 lakh in the scheme. new tax. So people in new tax regime, with income up to Rs 7 lakh will not have to pay any tax,” Ms. Sitharaman said as she presented Budget 2023 to parliament today. .

She also announced new tax tables and the removal of the old dual structure system that was opened in 2020, taxing citizens below 25% without exemption and 30% with exemption.

The new panels are:

0-3 lakh Rs – no tax

Rs 3-6 lakh – taxed at 5 percent

Rs 6-9 lakh – taxed at 10 percent

Rs 9-12 lakh – taxed at 15 percent

Rs 12-15 lakh- taxed at 20 percent

Over Rs 15 lakh – taxed 30%

“In 2020 I have introduced a new personal income tax regime with six tables of income starting from Rs 2.5 lakh. I propose to change the tax structure in this scheme by reducing the number of pounds. five and increase the duty free limit to Rs 3 lakh,” said Ms. Sitharaman.

In Budget 2020, the Treasury Secretary gave individual taxpayers an option to continue at the old rate, whereby they can still claim a tax exemption or choose a new reduced rate but there is no scope for claiming an exemption. .

The old tax regime had a tax rate of 30% for those earning Rs 15 lakh a year, but they could claim an exemption.

Those who have chosen the new regime first announced in 2020 and have an income above Rs 15 lakh are taxed at 25%, but they cannot claim an exemption.

Here is an example of how the new tax regime leads to more savings:

If your salary is Rs 7 lakh a year, then you don’t have to pay any tax. Before that, the rebate was Rs 5 lakh.

Now suppose your salary is Rs 9 lakh a year. It will be taxed by dividing the amount into plates. Whereby:

ONE. 0-Rs 3 lakh: no tax (previously 0-Rs 2.5 lakh)

Balance: Rs 6 lakh is taxed in two tables i.e. Rs 3-6 lakh portion at 5% and Rs 6-9 lakh share at 10%

b. Rs 3 lakh taxed at 5%: Rs 15,000

Balance: Rs 3 lakh is taxed per sheet, ie a share of Rs 6-9 lakh at 10%

C. Rs 3 lakh taxed at 10%: Rs 30,000

Total tax over Rs 9 lakh (sum of A, B and C): Rs 45,000

However, if the tax on this Rs 9 lakh is calculated using the old table (exempt Rs 0-2.5 lakh and rebate of Rs 5 lakh), you need to pay at least Rs 60,000 which means the New boards save some 25 percent.

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Budget 2023: Tax exemption on income up to Rs 7 Lakh a year in new tax regime


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