As the last full budget before Lok Sabha polls scheduled for 2024, the Union Budget 2023 has focused on the middle class and welfare schemes for the underprivileged. As expected the government has announced relief in taxation for common Indians, by extending the rebate limit to Rs 7 lakhs. Explaining this, the Finance Minister even said that those who make up to Rs 7 lakh a year don't need to pay any income tax.
What has the Finance Minister said?
But at the same time tax slabs for Rs 3 lakh to Rs 6 lakh income is set at 5 per cent, while the same for Rs 6 lakh to Rs 9 lakh is 10 per cent, for Rs 9 lakh to Rs 12 lakh its 15 per cent, for Rs 12 lakh to Rs 15 lakh its 20 per cent and for more than Rs 15 lakh its 30 per cent. This has left many confused about whether they will have to pay taxes for income up to Rs 7 lakh or not.
What does it mean?
To break this down further, the five new tax slabs are a result of new tweaks to the old tax regime. But those who opt for the new tax regime which has been enhanced further, won't pay any tax if they earn below Rs 7 lakh. These people will further pay only 5 per cent on income up to Rs 9 lakh, and only 10 per cent on an income up to Rs 15 lakh.
In addition to this, those who are under the old tax regime can switch to the new regime, while those in the new one can't go back. Those in the new regime will also lose exemptions given on house rent, mutual fund investments and ATC among others.
