New Tax Regime Changes: Finance Minister Nirmala Sitharaman has presented the budget for the year 2023 in the Lok Sabha. The job profession was expected to get a big relief from this budget.
But the announcement made by the Finance Minister for the tax payers is a bit complicated. Finance Minister Nirmala Sitharaman announced that there will be no tax on income up to Rs 7 lakh. But in reality this change has been made in the new tax regime. While no change has been made in the old tax regime.
The government promoting the new tax regime,
if you have already claimed income tax exemption under the old tax regime, then you have not benefited in any way. But if you have claimed till the financial year 2022 under the new tax regime, then you will get a direct benefit. That is, the benefit of this tax regime will be for those with higher salary. The Finance Minister said during the budget speech that now the default new tax regime will remain. Actually, the new tax regime is being promoted continuously by the government, under which this change has been made.
Understand the old tax regime
if you have selected the boy default new tax regime, then it will be heavy on your pocket and you will have to pay tax accordingly. You cannot claim any kind of tax exemption in the new tax regime. Whereas in the old tax regime, Rs 2 lakh can be claimed under 80C and NPS, Rs 2 lakh on home loan interest, medical insurance of Rs 25,000 under 80D and checkup of Rs 5,000. Apart from this, you can claim medical insurance premium of up to 50 thousand for senior citizens. Apart from this, standard deduction of 50 thousand rupees is also available in it. That is, you do not have to pay any tax on income up to Rs 10 lakh in this.
Understand the change of the new tax regime
the benefit of selecting the new tax regime will be only for those people whose annual income is up to Rs 7 lakh. You will have to pay tax as soon as you go above this. That is, if you have bought your own house and invest in a savings scheme, then the old regime is still beneficial for you. The Finance Minister has said that no tax will be levied on income up to Rs 7 lakh. But if your income is more than 7 lakhs, then you will not have to pay any kind of tax up to three lakh rupees. From three to six lakhs you will have to pay 5 percent tax and from 6 to 9 lakhs you will have to pay 10 percent tax.
Now this will be the tax calculation in the new tax regime
On income up to 0 to 3 lakh – zero tax
Income from 3 to 6 lakhs – 5% tax
Income from 6 lakh to 9 lakh – 10% tax
9 lakh to 12 lakh-15% tax
12 lakh to 15 lakh – 20% tax
30% income tax on above 15 lakhs
Old tax regime
Income up to 2.5 lakh – zero tax
Income from 2.5 lakh to 5 lakh – 5% tax
Income from 5 lakh to 10 lakh – 20% tax
Income from 10 lakh to 20 lakh – 30% tax
Income above 20 lakh – 30% tax
According to the Finance Minister, this time when you will pay income tax through the Income Tax website, you will get boy default new regime selected from old and new tax regime. Earlier, the old tax regime boy was selected by default. Here you have to be careful in the selection of tax regime.
If your income is more than 7 lakhs and you invest in different schemes, then you will have to continue the old tax regime. If you have left the new tax regime selected here, then you will have to pay heavy tax.
