The increase in this limit to 7 lakh means that a person whose income is less than 7 lakhs does not need to invest anything to claim exemptions, and the entire income is tax-free regardless of the amount of investment made by such an individual. This will give the middle-class income group more purchasing power because they will be able to spend their entire income without having to worry about investment schemes to take advantage of tax registrations break.
Changes in Income Tax slabs
The new tax rates are · · · · · · above 15 lakh- 30% The new system will reduce the six income levels to five. Tax assessors will be able to continue using the previous regime. Salaried and pensioners: the standard deduction under the new system for taxable income exceeding Rs15.5 lakhs is Rs52,500.
New income tax regime to be default regime
The new information technology system will serve as the tax regime by default. Tax assessors will be able to continue using the previous regime. Salaried and pensioners: the standard deduction under the new system for taxable income exceeding Rs.15.5 lakhs is Rs.52,500. The government is actively promoting the brand-new tax scheme, which is now the default. The basic exemption under this regime has been increased from 2.5 lakhs to 3 lakhs. Individual taxpayers earning up to 7 lakhs will not be required to pay taxes, up from the current limit of 5 lakhs.
Increase in the standard deduction
The finance minister announced that the standard deduction would be extended to pensioners under the new tax regime. Each salaried person earning 15.5 lakhs or more will receive 52,500. The maximum tax, including the surcharge, will be 39%. The maximum marginal tax rate has been reduced from 42.74% to 39% under the new tax regime. Encashment of leave Finally, the 3 lakh limit for tax exemption on leave encashment on the retirement of non-government salaried employees was last set in 2002, when the highest basic pay in the government was 30,000 pm. This limit was raised to 25 lakhs in line with the increase in government salaries.
Increase in the audit limit
The minister proposed raising the income range for small enterprises from 2 crores to 3 crores and for professionals from 50 lakhs to 75 lakhs to avail of the presumptive taxation scheme when presenting the Budget for FY2023-24. Investment in residential property for capital gains deduction capped at Rs 10 cr (Section 54F and 54 Exemptions) The Rs 10 crore limit on the cost of new residential property to claim long-term capital gains exemption will affect HNIs who benefit from large capital gains exemption due to high-value purchases.
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