Talk of benefits will start with the arrival of April, know how much tax will be charged on Rs 700,100
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Finance Bill 2023: finance bill 2023 Has been passed by the Lok Sabha. In this, along with 64 official amendments, many benefits have been included for the common taxpayer. These include setting up of GST Appellate Tribunal along with giving some relief to taxpayers adopting the new tax regime and withdrawal of long-term tax benefits from certain categories of mutual funds investing in bonds.
New Tax Regime
The government has given relief to the taxpayers who have opted for the new tax regime. For this, by amending the Finance Bill, a provision has been made that persons earning income slightly more than Rs 7 lakh tax free income will have to pay tax only on the additional income. The new tax regime will come into effect from April 1.
How much tax will be applicable on Rs 7,00,100
Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer’s annual income is Rs 7 lakh, then he does not have to pay any tax. But if the income is Rs 7,00,100, then due to this additional income the taxpayers have to pay tax of Rs 25,010.
There will be benefit on income up to Rs 7,27,777
That’s why it has been proposed to give minor relief through amendment so that the tax paid by the person should not exceed the increased income from the tax free income of seven lakhs. In the above case, the income in excess of Rs.7 lakh is Rs.100, so tax should also be levied on the same amount. According to the calculation, the tax expert said that individual taxpayers, whose income will be up to Rs 7,27,777, can get the benefit of this provision.
20 percent tax on royalties
Other amendments in the Finance Bill include increasing the tax rate on royalties and fees for technical services from 10 percent to 20 percent. All 64 amendments to the Finance Bill have been passed by voice vote. It will take the form of law after it is passed in the Rajya Sabha and approved by the President.
tax on bonds
Under the amendments made in the Finance Bill, from April 1, short-term capital gains tax will be levied on mutual funds investing in bonds or fixed income products. Till now investors used to get long term tax benefits on it and due to this this investment was popular. Currently, investors investing in mutual funds linked to bonds or fixed income products pay income tax on capital gains for three years. After three years, these funds pay 20 per cent without the effect of inflation or 10 per cent with the effect of inflation.
Investing in bonds changed in 2014
In 2014, the government changed the tax treatment of mutual funds investing in bonds. For short-term gains, the time limit was increased to three years and the tax rate was increased to 20 percent. In addition, credit card payments for foreign travel will be brought under the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India (RBI). Its purpose is to ensure that such expenses come under the purview of Tax Collection at Source (TCS).
Tax on sending money to other countries
In the budget for the financial year 2023-24, under the Liberalized Remittance Scheme, 20 percent TCS was proposed on sending money from India to any other country except education and medical from July 1, 2023. Prior to this proposal, five percent TCS was levied on sending more than seven lakh rupees outside India. LRS was introduced in 2004. Initially it was allowed to send $ 25,000. Later it was modified in a phased manner. Under this, Indians can send a total of $ 2,50,000 (Rs 2.05 crore) per financial year for transactions under current or capital account or both. Sending more than this amount requires RBI approval.
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