Income Tax 2023: These people are exempt under the new tax system
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Finance Minister Nirmala Sitharaman suggested a lot of amendments in the new tax system in the Union Budget 2023. These changes will be effective in the financial year 2023-2024. India’s Union Budget 2020 unveiled a new tax regime that gives a lower tax rate to anyone who is willing to give up specific exemptions and deductions. Until fiscal year 2022–2023, taxpayers can decide to continue making payments under the previous system; However, the new system will default on April 1 of 2023.
If taxpayers are willing to give up exemptions and deductions like House Rent Allowance (HRA), Leave Travel Concession (LTC), and others, they can avail of lower tax rates under the new tax regime.
For persons having income up to Rs.
Rs 3 lakh: No tax
Rs 3 lakh and Rs 6 lakh: 5% tax
Rs 6 lakh and Rs 9 lakh: 10% tax
Rs 9 lakh and Rs 12 lakh: 15% tax
Rs 12 lakh and Rs 15 lakh: 20% tax
Above 15 lakhs: 30% tax
It is important to remember that if a taxpayer opts for the new tax regime, he will not be able to avail the benefits of Section 80C, Section 80D and other deductions.
Exemption under new tax regime 2023-2024
The tax slabs have been restructured, and starting from the upcoming financial year, everyone will be using the new tax regime by default. The new tax structure includes a lower tax rate but no exemptions are available. Tax free has been increased to Rs 7 lakh.
standard deduction
A salaried taxpayer is allowed to claim standard deduction up to Rs 50,000. As per the new tax law, family pensioners are eligible for a standard deduction of Rs 15,000 per annum.
NPS contribution by employer
As a salaried employee, if your employer contributes to your NPS account, you are eligible to claim a deduction for the contribution made from gross income. This deduction has been claimed as per section 80CCD(2) of the Income Tax Act, 1961. 10% of the remuneration (Basic + DA) can be deducted as a maximum under section 80CCD(2).
Agniveer Corpus Fund
As announced in the budget speech, Agniveer can deduct from income any amount paid or deposited in Agniveer Corpus Fund under the newly proposed section 80CCH of the Income Tax Act.
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