Last Updated: March 24, 2023, 17:10 IST
New revenue tax slabs introduced within the Budget 2023-24.
The Finance Bill 2023, handed by the Lok Sabha on Friday, has proposed a marginal aid to taxpayers underneath new tax regime
In a aid to taxpayers choosing new tax regime, people incomes marginally increased revenue than no-tax ceiling of Rs 7 lakh can pay tax solely on the differential revenue after the federal government amended the Finance Bill.
The Finance Bill 2023, handed by the Lok Sabha on Friday, has proposed a marginal aid to taxpayers underneath new tax regime.
Explaining the supply, the finance ministry stated underneath the brand new tax regime with impact from April 1, if a taxpayer has annual revenue of Rs 7 lakh s/he pays no tax. But if s/he has revenue of Rs 7,00,100 s/he pays tax of 25,010.
Thus an extra revenue of Rs 100 leads to a tax of Rs 25,010.
Hence, marginal aid is proposed to that in order that the tax what one pays shouldn’t be greater than the revenue that exceeds Rs 7 lakh (Rs 100 on this case), the ministry stated.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala stated the modification to Finance Bill seeks to present a marginal aid to particular person taxpayers having borderline revenue by proposing a deduction of revenue tax payable in extra of the differential revenue above Rs 7 Lakh.
“Working out the mathematics, a person having revenue up to (approx.) INR 7,27,700 might stand to profit from this marginal aid,” Jhunjhunwala added.
The budget 2023-24 had announced the tax rebate whereby no tax would be levied on those with annual income of up to Rs 7 lakh under the new tax regime. The move which experts felt was a push for salaried class taxpayer to switch to new tax regime where no exemptions on investments is provided.
Under the revamped new tax regime, no tax would be levied for income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent. Further, a Rs 50,000 standard deduction was allowed under the new regime.
Although the government has not specified the threshold income which would be eligible for marginal relief, tax experts said as per computation, individual taxpayers with income of Rs 7,27,777 would be benefited by this relief.
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