Budget Expectation: Finance Minister Nirmala Sitharaman will present the general budget on 1 February 2023. In this budget, many announcements are expected to be made from the job profession to the farmers.
Experts claim that this is the last full budget of the government before the 2024 Lok Sabha elections. In such a situation, the government will leave no stone unturned to attract the countrymen. But the most discussed among the expectation from the budget is on increasing the tax slab and income tax exemption limit. The job profession is hopeful that this time after nine years, the Finance Minister will definitely increase the income tax exemption limit.
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
Actually, in the budget of 2020-21, an alternative income tax system was started 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 up to 2.5 lakh is tax free
In the new tax regime, income up to 2.5 lakh is tax free. 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 from 2,50,001 to 5 lakhs—-5% tax
Income from 5,00,001 to 7.5 lakhs—-10% tax
from Rs.10,00,001 to Rs.10
tax 30% tax on income above Rs.