Indian Budget 2023 Income Tax Highlights, Know in Simple terms

  • Post author:

Union Budget 2023 Income Tax Highlights. On Wednesday 1st February 2023, Finance Minister Nirmala Sitharaman announced the Union Budget for FY 23-24. The middle class has been given some relief in both old as well as the new Income Tax Regime. Nirmala Sitharaman says, “The new tax regime will benefit the hardworking middle class people.” Whereas, the new income tax regime will be the default income tax regime. Moreover, citizens will have the option to avail the benefits of old tax regime.

Here Download the Indian Union Budget 2023 Pdf.

Budget 2023 Income Tax Slabs 2023: These are the new Income tax slabs under the New Tax Regime

Total Income(₹)Income Tax (%)
Upto 3,00,000Nil
From 3,00,001 to 6,00,0005
From 6,00,001 to 9,00,00010
From 9,00,001 to 12,00,00015
From 12,00,001 to 15,00,00020
Above 15,00,00030
New Tax Regime

Resident individual with total income up to 5,00,000 do not pay any tax due to rebate under both old and new regime. It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to 7,00,000.

Firstly, Standard deduction of 50,000 to salaried individual, and deduction from family pension up to 15,000, is currently allowed only under the old regime. It is proposed to allow these two deductions under the new regime also.

Firstly, Rebate limit under the new tax regime to be increased from 5 lakh to 7 lakh. Furthermore, that means no tax have to be paid for earnings upto ₹7 lakh. Moreover, an individual with an income of ₹15 lakhs will only be required to pay ₹1.5 lakh as tax.

Also Read: India’s Growing Economy: How Growth is Fueling India’s Development.

In conclusion 45% of tax filed returns processed within 24 hours. Moreover, average processing time of returns reduced from 93 days to 16 days.

Budget 2023 Income Tax
Indian Union Budget 2023

Old Income Tax Regime Vs The New Income Tax Regime Budget 2023

On Wednesday 1st February 2023, Finance Minister Nirmala Sitharaman announced the Union Budget for FY 23-24. Let us compare the difference between the Old Income Tax Regime Vs The New Income Tax Regime 2023.

Under the new Income Tax Regime there will be no tax on income upto ₹7 lakh and additional ₹50000 standard deduction so there will be no tax on income upto ₹7.5 lakh.

10 exemptions and deductions that tax payers will have to forgo if they opt for the new regime.

  • Leave travel allowance exemption which is currently available to salaried employees twice in a block of four years
  • House rent allowance claimed as tax exempt upto certain specified limits if the individual was staying in rented accommodation.
  • Standard deduction of ₹50,000 currently available to salaried tax payers.
  • Deduction available under section 80TTA/80TTB will not be available to the taxpayers.
  • The most commonly claimed deductions under section 80C will also go.
  • The deduction claimed for medical insurance premium under section 80D will also not be claimable.
  • Tax benefits for disability under sections 80DD and 80DDB will not be claimable.
  • Tax break on interest paid on education loan will not be claimablesection 80E.
  • Tax break on donations to charitable institutions available under section 80G will not be available.
  • All deductions under chapter VIA (like section 80C, 80CCC, 80CCD, 80D, 80DD, 80DDB, 80E, 80G, 80GG, 80GGA, 80GGC etc) will not be claimable by those opting for the new tax regime.

Whereas I would suggest if someone having income less than 15 lakh should go for Old Income Tax Regime and invest their money and claim benefits. If you have education loan, home loan, pay insurance, invest in nps, fd, stocks and mutual funds. What I believe is you should definitely go for Old Income Tax Regime. Furthermore, most of the deductions are not available in the new Income Tax Regime. If you do not have any loans and neither you invest your money you should go for new Income Tax Regime.

Is Standard Deduction allowed in The New Income Tax Regime?
Yes, Standard Deduction is available in the new income tax regime.

Who Presented the Union budget 2023?
Finance Minister Nirmala Sitaraman Presented the Union Budget 2023.

Leave a Reply