Union Budget 2023: new income tax slabs?

Income of Rs 5 lakh and below do not pay any income tax, that limit has been increased to Rs 7 lakh.
The new Income Tax rates are: 

  • Rs 0-3 lakh – Nil
  • Rs 3-6 lakh – 5%
  • Rs 6-9 lakh – 10%
  • Rs 9-12 lakh – 15%
  • Rs 12-15 lakh – 20%
  • Above Rs 15 lakh – 30%

Finance Minister Sitharaman said that the new tax regime is the default tax regime. She also said that the government will adopt more measures to make the voluntary tax regime more attractive.

The minister said that the changes in personal income tax “primarily benefits our hard-working middle class”. She said that an individual with an annual income of Rs 9 lakh will be required to pay Rs 45,000, which is only 5 per cent of her income.

“It is a reduction of 25 per cent on what he or she is required to pay now, ie, Rs 60,000/-. Similarly, an individual with an income of Rs 15 lakh would be required to pay only Rs 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent from the existing liability of Rs 1,87,500,” she said.

The minister also proposed to extend the benefit of 34 standard deduction for the salaried class and the pensioners. “Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500,” she added. For the highest tax rate of 42.74 per cent, the highest surcharge rate has been reduced from 37 per cent to 25 per cent. This would result in reduction of the maximum tax rate to 39 per cent. .

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