- Rebate limit of Personal Income Tax to be increased to RS. 7lakh from the current RS. 5lakh in the new tax regime. Thus, persons in the new tax regime, with income up to RS. 7lakh to not pay any tax.
- Tax structure in new personal income tax regime, introduced in 2020 with six income slabs, to change by reducing the number of slabs to five and increasing the tax exemption limit to RS. 3lakh. Change to provide major relief to all tax payers in the new regime.
- New Tax Rates :
| Total Income (RS) | Rate(percent) |
| Up to 3,00,000 | Nil |
| From 3,00,001 to 6,00,000 | 5 |
| From 6,00,001 to 9,00,000 | 10 |
| From 9,00,001 to 12,00,000 | 15 |
| From 12,00,001 to 15,00,000 | 20 |
| Above 15,00,000 | 30 |
- Proposal to extend the benefit of standard deduction of RS. 50,000 to salaried individual, and deduction from family pension up to RS. 15,000, in the new tax regime.
- Highest surcharge rate to reduce from 37 per cent to 25 per cent in the new tax regime. This to further result in reduction of the maximum personal income tax rate to 39 per cent.
- The limit for tax exemption on leave encashment on retirement of non-government salaried employees to increase to RS. 25lakh.
- The new income tax regime to be made the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime.
- Enhanced limits for micro enterprises and certain professionals for availing the benefit of presumptive taxation proposed. Increased limit to apply only in case the amount or aggregate of the amounts received during the year, in cash, does not exceed five per cent of the total gross receipts/turnover.
- Provision of a higher limit of RS. 2lakh per member for cash deposits to and loans in cash by Primary Agricultural Co-operative Societies(PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs).
- A higher limit of RS. 3crore for TDS on cash withdrawal to be provided to co-operative societies.
- Date of incorporation for income tax benefits to start-ups to be extended from 31.03.23 to 31.3.24.
- Deduction from capital gains on investment in residential house under sections 54 and 54F to be capped at RS. 10crore for better targeting of tax concessions and exemptions.
- Proposal to limit income tax exemption from proceeds of insurance policies with very high value. Where aggregate of premium for life
- insurance policies (other than ULIP) issued on or after 1st April, 2023 is above RS. 5lakh, income from only those policies with aggregate premium up to RS. 5lakh shall be exempt.
- Minimum threshold of RS. 10,000/- for TDS to be removed and taxability relating to online gaming to be clarified. Proposal to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of the financial year.
- TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases.
Category: snjca