As the new financial year 2023-24 begins, the income tax changes announced in the Budget 2023 by Finance Minister Nirmala Sitharaman have come into effect. Here are the significant changes to the tax regime:
Read More:-Google To Eliminate Free Snacks, Laundry Services, And Other Perks To Employees – Here’s Why
1. New default tax regime:
The new income tax regime has become the default tax regime from April 1, 2023. However, taxpayers can still choose to opt for the previous tax regime. The standard deduction for the new tax regime is Rs 52,500 for salaried individuals and pensioners with taxable income exceeding Rs 15.5 lakh.
Read More:-LIC Hikes Stake in Bata India to Over 5%
2. Standard deduction:
The standard deduction of Rs 50,000 remains unchanged for the previous tax regime and is now extended to the new tax regime for pensioners.
Read More:-Mumbai: Four, including two senior citizens get 2-year jail for 23-year-old bank fraud
3. Increased tax rebate limit:
The tax rebate cap has been raised from Rs 5 to Rs 7 lakh, making individuals with income under Rs 7 lakh exempt from any tax regardless of their investments.
Read More:-Aadhaar and PAN made compulsory for PPF, SSY, and other micro-savings schemes: All you need to know
4. Leave Travel Allowance (LTA)
Non-government employees are exempt from leave encashment requirements up to a limit of Rs 25 lakh.
5. Short-term capital gains tax on debt mutual funds:
Investments in debt mutual funds will be subject to short-term capital gains tax starting today.
Read More:-8th Pay Commission may dwarf 7th Pay boost for central government employees, details inside
6. Market Linked Debentures (MLDs)
From today, investments in MLDs will be considered short-term financial assets, ending grandfathering of previous investments with slightly negative effects on the mutual fund sector.
7. Taxation of life insurance premiums:
From April 1, 2023, proceeds from life insurance premiums exceeding the yearly premium of Rs 5 lakh will be taxable, but Unit Linked Insurance Plans (ULIPs) are exempt from this regulation.
Read More:- India Has Robust System, Giving Confidence To Overseas Investors: FM Nirmala Sitharaman
8. Benefits for senior citizens:
The highest deposit limit for the Senior Citizen Savings Scheme has increased from Rs 15 lakh to Rs 30 lakh, while the highest deposit limit for the monthly income scheme has increased from Rs 4.5 lakh to Rs 9 lakh for single accounts and from Rs 7.5 lakh to Rs 15 lakh for joint accounts.
Read More:-At Rs 1.61 trillion, March GST collections up 22% on year
9. No capital gains tax on conversion of physical gold to e-gold receipts:
From April 1st, 2023, converting physical gold to Electronic Gold Receipts (EGRs) or vice versa will not attract capital gains tax.
Read More:-UPI transactions crossed high of Rs 14 lakh crore in March
10. Changes in income tax slabs:
Income tax slabs have been revised with a 0% tax rate for those earning up to Rs 3 lakh, 5% for incomes between Rs 3 lakh to Rs 6 lakh, 10% for incomes between Rs 6 lakh to Rs 9 lakh, 15% for incomes between Rs 9 lakh to Rs 12 lakh, 20% for incomes between Rs 12 lakh to Rs 15 lakh, and 30% for incomes above Rs 15 lakh.
