During the Union Budget speech in the House, Union Finance Minister Nirmala Sitharaman on Wednesday announced change in income tax slabs, up to ₹7 lakh rebate under new income tax regime.
“The rebate under section 87A of new income regime hiked to ₹7 lakh,” said Finance Minister while presenting Budget 2023.
Here are the 5 income tax rule changes announced by FM Sitharaman in Budget 2023
1) Tax rebate limit raised to rs 7 lakh from ₹5 lakh
2) Changes in Income Tax slabs
0-3 lakh – nil
3-6 lk – 5%
6-9 lk – 10%
9-12 lk – 15%
12-15 lk – 20%
above 15 – 30%
3) New Income Tax regime to be default regime
4) An Individual with an annual income of 9 lakhs will be required to pay only 45,000.
5) Maximum tax, along with surcharge, will be 39%. The Current tax rate in country is 42.74%, among the highest in world. Budget23 proposes to reduce the highest surcharge rate from 37% to 25% in the new Tax regime. This will result in the reduction of the maximum tax rate to 39%.
Finance Minister also announced that the average processing time for income tax returns reduced from 93 days to 16 days.
The income tax slabs were not changed since 2014. The basic personal tax exemption limit was last revised in 2014.