Last Updated: April 12, 2023, 08:13 IST
Check Income Tax Rules That Have Changed
If an worker fails to decide on between the brand new and outdated tax regime, the employer will take the brand new revenue tax regime as default? Know extra
The Central Board of Direct Taxes (CBDT) has issued a brand new notification relating to the brand new tax regime. If an worker fails to decide on between the brand new and outdated tax regime, the employer will take the brand new revenue tax regime as default and subtract the tax deducted at supply (TDS) underneath it. As per Finance Minister Nirmala Sitharaman, the brand new tax regime would be the default one from monetary yr 2023-24. In accordance with this, the CBDT has issued a round relating to the TDS deduction.
“If intimation is not made by the employee, it shall be presumed that the employee continues to be in the default tax regime and has not exercised the option to opt out of the new tax regime. Accordingly, in such a case, the employer shall deduct tax at source, on income under section 192 of the Act, in accordance with the rates provided under sub-section (lA) of section 115BAC of the Act,” the round mentioned.
It is the duty of the employer has to hunt info from the worker in regards to the meant tax regime and deduct the tax accordingly after getting the knowledge.
Differences between new and outdated tax regime:
Under the brand new tax regime, the fundamental exemption restrict has been hiked to Rs 3lakh. The quantity of rebate underneath Section 87A has been elevated to taxable revenue of Rs 7 lakh underneath the regime. Standard deduction of Rs 50,000 has additionally been launched within the system. Salaried workers and pensioners can choose for the standard deduction of Rs 50,000 underneath the brand new revenue tax regime. There are six tax slabs underneath the regime.
Those who want to proceed with the outdated revenue tax regime will get exemptions equivalent to Section 80C, which might cut back the taxable revenue by Rs 1.5 lakh. The tax slabs and fundamental exemption restrict stay unchanged. The outdated tax regime additionally affords deduction on loans and medical health insurance premiums. Those who want to go for the outdated tax regime should specify it annually.
Taxpayers should word that they can’t change the tax regime for a monetary yr as soon as they’ve made a selection. They should select the tax regime helpful for them after weighing all the professionals and cons.
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