Budget 2023: All you need to know about new tax slabs

Written by  Ritika Nath   |  February 01st 2023 02:30 PM  |  Updated: February 01st 2023 02:39 PM

Budget 2023: All you need to know about new tax slabs

Budget 2023: A number of modifications to the income tax slabs under the new tax system were unveiled by Finance Minister Nirmala Sitharaman. An individual will not be subject to tax under the new tax system on income up to Rs 7 lakh if all rebates are taken into account.

Under the new system, a person making Rs 9 lakh a year will only have to pay tax on Rs 45,000. In the current system, this represents just 5% of a taxpayer's income. The new tax system has a standard deduction of Rs 52,500. The new tax system would be the default system, the FM added.

Revised tax slabs under new tax regime:

  • 0–3 lakh in annual income: nil.
  • A 5% tax rate will apply to income over 3 lakh and up to 5 lakh.
  • The new tax regime will tax income over 6 lakh and up to 9 lakh at a rate of 10%.
  • 20% tax is applied to income over 12 lakh rupees and up to 15 lakh rupees.
  • The tax rate for income beyond Rs. 15 lakh is 30%.

The finance minister declared that the new income tax system would be the standard tax system, however, individuals would still have the choice to pay taxes under the previous system.

Filmmaker Ashoke Pandit responded to this year's budget by saying, "It is sad that all administrations consistently disregard our entertainment business. Whether it be the textile, soap, or health industries, we have not discussed them in the same manner that other businesses are discussed in budgets."

He further stated, "No one considers our entertainment industry, no one considers how to save the business, no one considers how to expand it, in the same manner that other industries are identified, studied, debated, and advantages are considered for that industry. I hope that our industry will gain in some way from this budget, since we are pleased with it."

Budget 2023 is significant

India will prioritise strengthening its economy, creating jobs, and reducing its fiscal deficit, according to the finance minister. Before the Lok Sabha elections in 2024, it was the government's final complete budget presented to Parliament.

According to her, the goal is to have strong public finances and a healthy financial sector for the benefit of all societal segments. According to Sitharaman, the government would aim to reduce its budget deficit from 6.4% of GDP in the current fiscal year to 5.9% of GDP in 2023–24.

Given that the country's next Lok Sabha election is set for April–May 2024, this year's Budget is extremely significant. Tuesday saw the commencement of the Parliament's budget session. The President gave a speech before the Economic Survey for 2022–2023 was delivered. The formal process of developing the yearly Budget for the following fiscal year (2023–24) was initiated on October 10.

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