Today on 1 February 2023, our Union Finance minister Nirmala Sitharaman announced a new tax regime under the Budget 2023. And today there was good news for people, especially Middle-class people regarding Income tax. She announces a new tax slab. As per the new tax regime, if your income is under 7 lakhs per year, you don’t have to pay any tax.
The new tax slab is completely different from the old tax slab. Earlier there were six slabs but now there are only 5 slabs. The earlier basic exemption limit was 2.5 lakhs but now it has been revised to 3 lakhs. In simple words, it is very beneficial for those people whose income is less than 7 lakhs per year. However, who fall above 7 lakhs, this income tax slab may be good for them also.
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New Tax Slab Regime
This was the last full budget before the upcoming Lok Sabha election in India in 2024. Union Finance Minister Nirmala Sitharaman announced multiple things related to tax including the new tax slab. Here is the new tax slab:
- Rupees 0 to 300000 – NIL Tax
- Rupees 300000 to 600000 – 5%
- Rupees 600000 to 900000 – 10%
- Rupees 900000 to 1200000 – 15%
- Rupees 1200000 to 1500000 – 20%
- Rupees 1500000+ – 30%
As you can see the revised tax slab is in an image also.
The new tax slab has become the default tax regime. So currently there are two tax regimes, old and new. In other words, now individuals have two different options to pay income tax. The first old tax regime and the second is the new default tax regime.
The government has also announced the reduction of the surcharge from 37% to 25% under the new tax regime and it is also one of the important announcements for the day. The new tax slab is simple and you can understand the tax slab easily and calculate income tax.
After, seeing the current slab, I can say that now salaried individuals may have more money in hand. And it is good for them because compliance will also be more simplified. The above is just a brief overview. And for more detail, you can visit the income tax site or may contact experts.
Guys, what is your opinion regarding the new tax slab? What do you think, it is beneficial for people or not? In my opinion, the new tax slab is good because, now Individuals who are earning less than 7 lakhs per year, have no income tax liability. It means if you have an annual income is less than 7 lakhs, you may not pay any tax.
A new tax regime is more beneficial for those people who don’t do so much investment and don’t have many tax-saving instruments. So if you are a person who invests very less in tax-saving schemes like insurance, etc, this new slab is very good for you.
However, it is important, to consider all your factors and income before coming to final conclusion. You should also compare the tax payable amount under both options and then you should understand which one is more beneficial for you.
Sometimes people also ask what is Income tax slab. Basically, In India, there is a tax slab system and individual taxpayers pay their taxes according to the slab system. You pay your income tax as per the income and tax category in which you fall. I am not a finance expert, so I would say you should not take this brief article as final conclusion.
