Budget 2023: Income of Rs 7 lakh is tax free, then how about 5% tax on Rs 6 lakh? Understand the facts from CA Saket Modi
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Ranchi : Finance Minister Nirmala Sitharaman has announced tax-free annual income up to Rs 7 lakh under the new system of income tax in the Union Budget presented in the Lok Sabha on Wednesday. Along with this, he has also reduced the income tax slab from 6 to 5. In these categories of income tax, tax zero has been kept on income from zero to Rs 3 lakh, but in the slab ranging from Rs 3 lakh 1 thousand to Rs 6 lakh, 5 percent tax has been fixed. Now in such a situation, the question is arising in front of the people that when the government has kept the annual income up to Rs 7 lakh tax free, then how about 5% tax on the income of Rs 6 lakh? To clear the question arising in the minds of common people, we spoke to Chartered Accountant Saket Modi. Come, let us understand about the tax levied under the new tax regime.
what is the new tax regime
The new income tax regime was introduced in the budget 2021-22. Under this, no income tax will be levied on annual income up to Rs 7 lakh without any deduction. However, if the annual income exceeds Rs 7 lakh, it will be taxed. The number of income tax slabs was reduced from six to five. 5 per cent on Rs 3 to 6 lakh and 10 per cent on Rs 6 to 9 lakh, 15 per cent on Rs 9 lakh to Rs 12 lakh and 20 per cent on Rs 12 lakh to Rs 15 lakh and 30 per cent on income above Rs 15 lakh have to pay.
Income tax free up to Rs 7 lakh, then how about 5% tax on Rs 6 lakh?
Explaining the tax to be levied under the new tax regime, Chartered Accountant Saket Modi says that if a person’s annual income is Rs 7 lakh, then no tax will be levied on him. At the same time, if his income becomes 7 lakh 1 thousand rupees, then he will join the category of zero to 3 lakh, but he will also not have to pay any tax. That is, whose annual income is up to Rs 10 lakh, he will come under the tax net under the new tax regime, but he will not have to pay tax. Earlier income up to Rs 5 lakh was kept tax free, which has now been increased to Rs 7 lakh.
Which tax regime will be beneficial for salaried
Saket Modi said that it does not happen that salaried and someone else. It has to be seen how much exemption you have. It is also seen in this that how much exemption is there under 80C, how much exemption is available under 80CCD. In this, we have to study case to case and then decide who will get how much exemption. There is no thumb rule or special rule for this.
Is it better to stay in the old tax system or is it beneficial to go to the new system?
Chartered Accountant Saket Modi said that it is very difficult to decide. He said that if there is an income of up to Rs 7 lakh, then staying in the new tax regime is beneficial. On the other hand, if there is an income of more than Rs 7 lakh, then it can be decided only after getting someone calculated. The benefits of the new-old system are not known just by telling the salary. For this it has to be seen how much exemption he has got. In this, tax exemption available under 80C, 80CCD, 80U, 80T will have to be seen. Now if we talk about salary only, then when someone’s annual income is 16 lakhs, then it will be beneficial to stay in the new tax system.
Will there be exemption under 80C and 80CCD in the new system?
He will not get tax exemption under 80C, 80CCD under the new tax regime. This will be applicable only in the old system. Under the new system, no taxpayer will get the benefit of exemption.
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