New Income slabs—new versus old: On February 1, 2024, Finance Minister Nirmala Sitharaman will unveil Prime Minister Narendra Modi’s government’s interim budget for FY25. The government creates an interim budget rather than presenting a complete budget during an election year. also referred to as an account vote.
The Union Budget’s tax rebate announcements are eagerly anticipated by the Aam Aadmi. Slab rates were adjusted by Finance Minister Nirmala Sitharaman during the presentation of Budget 2023 on February 1, 2023.
As 2023 draws to a close, let’s review the differences between the new and old income tax slab rates.
Current and New income tax slabs
1) Income tax regimes
New vs old: If you haven’t had a chance to learn about the differences between the two, now is a good time to determine which one would be most advantageous to you.
2) Under the new tax regime, individuals earning up to ₹7 lakh annually would not be subject to any taxes
As per the proposed changes in the Union Budget 2023. In the event that your income exceeds ₹7 lakh, the new tax regime is preferable because it eliminates taxes up to that amount and offers a standard deduction of ₹50,000.
3) New tax slabs
- No tax would be levied for income up to ₹3 lakh
- Income between ₹3-6 lakh would be taxed at 5 per cent
- Income between ₹6-9 lakh would be taxed at 10 per cent
- Income between ₹9-12 lakh at 15 per cent
- Income between ₹12-15 lakh at 20 per cent
- Income of ₹15 lakh and above will be taxed at 30 per cent.
4) Old tax slabs
- Income up to ₹2.5 is exempt from taxation under old tax regime.
- Income between ₹2.5 to ₹5 lakh is taxed at the rate of 5 per cent under the old tax regime.
- Personal income from ₹5 lakh to ₹7.5 lakh is taxed at a rate of 15 per cent under the old regime
- Income between ₹7.5 lakh to ₹10 lakh is taxed at a rate of 20 per cent in the old regime
- Under the old regime personal income above ₹10 lakh is taxed at a rate of 30 per cent.
5) Personal finance experts predict that the previous tax system will continue to be appealing to taxpayers who have a home loan or pay rent because it includes exemptions for specific investments and expenses.
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