Published On : Wed, Feb 1st, 2023

Do you earn Rs 5 lakh, Rs 10 lakh or Rs 15 lakh? Know how much Income Tax you will have to pay in new slabs!

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New Delhi: Finance Minister Nirmala Sitharaman, in the Union Budget 2023-24 presented on February 1, tweaked the slabs to provide some relief to the middle class by announcing that no tax would be levied on annual income of up to Rs 7 lakh under the new tax regime.

She also allowed a Rs 50,000 standard deduction to taxpayers under the new regime, where assesses cannot claim deductions or exemptions on their investments.

Here is a list of announcements relating to the Income Tax, announced in the Budget.

1. There were six income slabs starting from Rs 2.5 lakh. Now, the tax slabs have been reduced and the limit has been raised to Rs 3 lakh.

2. No tax for income up to Rs 3 lakh; 5% tax on Rs 3-6 lakh; 10% tax on Rs 6-9 lakh, 15% tax on Rs 9-12 lakh, 20% tax on Rs 12-15 lakh and 30% on income above Rs 15 lakh under new I-T regime.

3. The limit of Rs 3 lakh for tax exemption on leave encashment on government salaried employees. That was set in 2002 when government salaries were lower and is now being raised to Rs 25 lakh.

4. The Government proposes to increase the income tax rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime.

5. A person earning Rs 9 lakh a year will now be paying just Rs 45,000 instead of Rs 60,000 currently. An individual with income of Rs 15 lakh will have to pay Rs 1.5 lakh tax down from Rs 1.87 lakh under the new tax structure.

6. The highest tax rate in our country is 42.74%, it is among the highest in the world. The highest surcharge rate will be reduced from 37% to 25% in the new tax regime. This will result in the reduction of the maximum tax rate to 39%.

7. Proposal to extend Rs 50,000 standard deductions to salary earners under the new tax regime.

8.The new income tax regime will now become the default option, but people will still have the option to go for the earlier regime.