Income tax slabs update: Budget 2023-24

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The finance minister Nirmala ​​Sitharaman presented the Union Budget 2023 on February 1, 2023. There are no changes in the old tax regime whereas the new regime will now have lower tax rates and fewer tax slabs with no common exemptions and deductions.

The new five-slab tax structure under budget 2023-24:

0 to ₹3 lakh: Nil

3 lakh - 6 lakh: 5%

6 lakh - 9 lakh: 10%

9 lakh - 12 lakh: 15%

12 lakh - 15 lakh: 20%

15 lakh - above: 30%

Highlights:

• The new income tax regime will be the default tax regime from April 1, 2023. However, you will still be able to opt for the old regime.

• The number of tax slabs is reduced to 5 from 7, increasing the tax exemption limit to Rs 3 lakhs.

• Taxpayers with earnings up to ₹7 lakhs are exempted from tax as compared to the current limit of ₹5 lakhs in the previous regime.

• Under the new regime, the standard deduction for taxable income exceeding Rs.15.5 lakhs will be Rs.52,500.

• The average processing time for income tax returns was reduced from 93 days to 16 days.

• Individuals with an annual income of ₹ 9 lakh will be required to pay only ₹ 45,000 as opposed to ₹ 60,000 under the old regime.

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