New Delhi: Union Finance Minister Nirmala Sitharaman will present the Union Budget for this year on February 1, 2023. This will be the last full budget of the Narendra Modi 2.0 government.
Most people are eager to know about the announcement by the Finance Minister about the income tax slabs and rates. At present, the income tax is exempt for individuals on an annual income of up to Rs 2.5 lakh, while it can be tax-free up to Rs 5 lakh under the new tax regime using rebate under Section 87A.
Currently, there are two income tax regimes. Individuals can use any one of these. Under the old regime, the income tax is exempt up to Rs 2.5 lakh, and over and above this, various deductions can be claimed under Section 80C, 80D, 80CCD, etc, to reduce taxable income.
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Under the new income tax regime, which was introduced in the Budget 2021-22, no income tax is levied on an annual income of up to Rs 5 lakh, without any deductions. However, if the annual income exceeds Rs 5 lakh, let’s say if it becomes Rs 5.5 lakh, income tax on the whole Rs 3 lakh is levied (income up to Rs 2.5 lakh is exempt under both regimes). No deductions can be claimed under the new regime.
Existing Income Tax Slabs and Rates Under Old Regime Vs New Regime:
Annual Income (in Rs) — Old Regime — New Regime
up to Rs 2,50,000 — Nil — Nil
2,50,000-5,00,000 — 5% — 5%
5,00,000-7,50,000 — 20% — 10%
7,50,000-10,00,000 — 20% — 15%
10,00,000-12,50,000 — 30% — 20%
12,50,000-15,00,000 — 30% — 25%
Above 15,00,000 — 30% — 30%.
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