Let us tell you that if you have not selected the tax regime, then automatically the new tax regime will be selected.

Taxpayers who want to change the tax regime can do so now? Come, let us know the answer to this question.

Default tax regime

In Budget 2023, Finance Minister Nirmala Sitharaman had made changes in the Income Tax slab. He had announced the new tax regime. In this, Rs 3 lakh annual income is tax free and the tax has been rebooted to Rs 5 lakh. Let us tell you that the tax regime is the default regime.

Also Read: Income Tax Saving Tips: You will not have to pay even a single rupee tax on income up to Rs 10 lakh, know how to save

If the taxpayer has not yet selected the tax regime, then tax will be paid under the automatic new tax regime. Apart from this, the company will also deduct TDS under the new tax regime.

How To Switch Tax Regime?

The Central Board of Direct Taxes (CBDT) has not yet given any information regarding whether the tax regime can be changed. This clearly means that whether the tax regime can be changed or not is not yet clear.

However, regarding this, tax experts say that the company gives the option to the taxpayer to settle the tax. If the company does not give this option to the taxpayer then there is no remedy for it.

At the same time, many experts say that the taxpayer can select the tax regime when he files ITR. That is, while filing returns, taxpayers can choose the regime as per their choice.

The post Tax Regime Change: Can I change New Tax Regime to Old Regime? Know everything here first appeared on Rightsofemployees.com.

Now let us see what are the tax benefits on investing in NPS:-

Tax benefit on investment in Tier-I account under old tax regime

-Tax benefit u/s 80CCD(1) u/s 80CCD(1) up to a maximum of Rs 1.5 lakh in Tier-I account in NPS or 10% of annual salary (basic salary plus DA) for salaried/salaried individuals and non-salaried/self-employed For a maximum of 20% of the gross total income, whichever is less, the benefit of tax exemption ie deduction is available on the investment. For example, if your salary (basic salary plus DA) is 20 lakhs and you contribute 2 lakhs to NPS. But you can get exemption under 80CCD(1) only up to a maximum annual investment of Rs 1.5 lakh.

One more thing 80C (Life Insurance, PPF, NSC, Senior Citizen Savings Scheme, SSY, Bank / Post Office FD, NPS, ULIP, Term Plan, ELSS, Repayment of principal amount of home loan, tuition fees of two children …..etc) , 80CCC (Annuity/Pension Plan) and 80CCD(1) tax exemption can be availed only on annual investment up to a maximum of Rs 1.5 Lakhs.

Tax benefit under 80CCD (1b)

Under 80CCD (1b), investment of Rs 50,000 in NPS Tier-I account is tax exempt in addition to the limit / limit of 80CCD (1). Overall, you can get tax exemption on investment up to a maximum of Rs 2 lakh in NPS in a financial year. Even if you have invested up to a limit of Rs 1.5 lakh annually under 80C and 80CCC, you can still get a separate tax exemption on investment of Rs 50,000 in NPS under 80CCD (1b).

Tax benefit under 80CCD (2)

Under 80CCD (2), there is also a provision for tax exemption on the contribution made by the employer to the NPS for the employee. But the tax exemption will be available only on the contribution of 10 percent of basic salary plus DA for private employees and up to 14 percent of basic salary plus DA for government employees. Deduction under 80CCD(2) is available only to salaried individuals.

Tax benefit on investment in Tier-II account

For central government employees, a provision has been made for tax exemption under 80C on the maximum investment amount of Rs 1.5 lakh in Tier-II account. Provided the lock-in period of the investment is at least 3 years.

Tax benefits under the new tax regime

In the new tax regime, there is a provision of tax benefit under 80CCD(2) only. This means deduction is available on the contribution made by the employer to the NPS for the employee. But this benefit will be available to the private employee only on the amount contributed by the employer up to 10% of his basic salary. While for government employees, on the contribution of 14% of the basic salary plus DA from the employer.

Tax treatment on NPS

NPS is also in EEE ie exempt-exempt-exempt category like PPF (PPF), EPF (EPF) and SSY (SSY). Means where there is no tax on deposit, no withdrawal and no interest received. Means there is tax exemption on maximum 60% withdrawal. In NPS, only 60% of the total maturity amount is allowed to be withdrawn. The remaining 40% of the maturity amount has to be invested in an annuity/pension plan.

Tax on annuity

Although the amount invested in annuity is tax-free, there is no tax exemption on regular income/pension received as returns under annuity. This means that the regular amount received as a return is added to the annual income of the investor and the taxpayer has to pay tax according to the tax slab.

The post NPS: You can avail tax benefits under both new and old regime first appeared on Rightsofemployees.com.

At the same time, many people are also saying that the income tax rates and slabs which were applicable in the assessment year 2022-23, can remain applicable in the new assessment year (AY 2023-24) as well.

Let us tell you that at present two tax systems are in force in the country. You can choose any of these according to your convenience. Now it has to be seen what changes will happen next year.

Income Tax Slabs and Rates 2023 (New Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-7.5 lakh: 10%
7.50-10 lakh Annual income up to Rs.15 lakhs: 15%
Annual income up to Rs.10-12.5 lakhs: 20%
Annual income up to Rs.12.5-15 lakhs: 25% Annual income up to Rs.15-20 lakhs
: 30%
20 lakhs On annual income above Rs.: 30%

Income Tax Slabs and Rates 2023 (Old Regime)

On annual income up to Rs 2.5 lakh: Zero On annual income
up to Rs 2.5-5 lakh: 5% On
annual income up to Rs 5-10 lakh: 20%
10-20 lakh Annual income up to Rs. 30%
Annual income above Rs. 20 lakhs: 30%

Changes in income tax rates and slabs expected in Budget 2023

Several tax experts and industry bodies have urged the government to revise income tax rates in certain slabs to provide relief to taxpayers. The tax rate for individuals has not been changed since FY 2017-18 (new tax regime in FY 2020-21). Experts are expecting that to give some relief to the employed taxpayers, the top tax rate of 30 per cent should be reduced to 25 per cent and the top tax limit should be increased from Rs 10 lakh to Rs 20 lakh.

Tapti Ghosh, partner, Deloitte India, expects from the budget:

Income Tax Rates (Old Regime)
Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income
up to Rs 5-10 lakh: 20%
Annual income up to Rs 10-20 lakh: 20%
Annual income above Rs 20 lakh: 25%

Income Tax Rates 2023 (New Regime)

Annual income up to Rs 2.5 lakh: Nil Annual income
up to Rs 2.5-5 lakh: 5% Annual income up to Rs 5-7.5 lakh
: 10%
Annual income up to Rs 7.50-10 lakh : 15%
Annual income up to Rs 10-12.5 lakhs: 20% Annual income
up to Rs 12.5-15 lakhs: 20% Annual income
up to Rs 15-20 lakhs: 20%
Annual income above Rs 20 lakhs: 25%

The post Income Tax Rate and Slab 2023: What will be the tax rates and slabs for ITR filing in the new year? first appeared on Rightsofemployees.com.