Income Tax: Income Tax is very important like other important things in the life of common man. Government’s preparations for the 2023 budget have started and people are expecting changes in the tax slab this time. At the very beginning of the pre-budget meetings, the demand for revising it has started rising.
The central government is considering increasing the tax-free slab to Rs 3 lakh in the two-year-old alternative personal income tax regime. According to a government official, at present the taxpayer does not have to pay any tax if his annual taxable income is Rs 2.50 lakh. By increasing the scope of tax-free slabs, the tax burden on the taxpayers will be reduced and they will be left with more money to spend or make suitable investments.
Demand to increase the exemption available under 80C
Experts are hopeful that this time the income tax exemption limit can be increased from two and a half lakh rupees to three to five lakh rupees from the government. In the era of rising inflation, increasing the income tax rebate limit will leave more money in the hands of the people to spend. Standard deduction can also be increased from 50,000 to 75,000. The job profession is also demanding to increase the limit of investment limit available under 80C. Apart from this, there is also a demand to increase the limit of money deposited in PPF. But do you know that after the changes made in the last days, tax payers have stopped getting the benefit of exemption under 80C.
More tax slab than old tax regime:
In fact, in the budget of 2020-21, an alternative income tax system was introduced by the government, different from the traditional tax system. This was called the new tax regime. Finance Minister Nirmala Sitharaman had said recently that the old tax regime is useful for the low income group. In this, you can claim tax exemption in 7-10 ways. But you cannot claim any kind of deduction in the new tax slab. In this system, there are more tax slabs than the old tax regime.
Income tax free up to 2.5 lakhs:
Income up to 2.5 lakh is tax free in the new tax regime. After this, there are seven different slabs of income tax. In this, you cannot claim tax exemption on 80C, 80D, medical insurance, housing loan etc. In this, 25 percent tax has to be paid on income up to 15 lakhs and 30 percent tax on income above 15 lakhs. Standard deduction is available on rent in the new tax system. Apart from this, income tax is exempted on income from agriculture, PPF interest, maturity amount of insurance, death claim, compensation received on retrenchment, leave encashment on retirement etc.
New tax regime:
Income up to 2.5 lakhs—0% tax
Income up to Rs 2,50,001 to 5 lakhs—5% tax Income up to
Rs 5,00,001 to 7.5 lakhs—10% tax
Income from Rs 7,50,001 to 10 lakhs ——15% tax
on income from Rs 10,00,001 to 12.5 lakhs——20% tax on income
from Rs 12,50,001 to 15 lakhs——25% tax
on income above Rs 15 lakhs——30% tax