The start of a new fiscal year is April 1. Today marks the implementation of the income tax proposals in the Union Budget.
These modifications were disclosed by Finance Minister Nirmala Sitharaman during her Budget speech earlier in February.
Let’s examine some of the tax law modifications that will take effect on April 1st:
The new tax regime, which intends to facilitate tax filing and encourage greater participation in the new regime, will be adopted by default.
If the previous tax system works better for the taxpayers, they will still be free to continue using it.
The following will be the tax slabs:
— The tax rate on income between Rs 3 lakh and Rs 6 lakh is 5%.
Promotion
Taxes range from Rs 6 lakh to Rs 9 lakh, with a 10% rate.
15% of the first Rs 9 lakh to Rs 12 lakh will be taxed.
Taxes on amounts between Rs 12 and Rs 15 lakh will be 20%.
— Taxes on amounts over Rs 15 lakh will be 30%.
Additionally, the standard deduction of Rs 50,000 that was part of the previous tax regime has been included in the new one.
This will lower taxable income even more under the new system.
Observe a few additional points:
— The maximum surcharge rate, which was 37% on income exceeding Rs 5 crore, has been lowered to 25%.
Taxes will be applied to maturity proceeds from life insurance policies issued on or after April 1, 2023, if the total premium exceeds Rs 5 lakh.
Promotion
Promotion — The limit for non-government employees to deduct taxes on leave encashment has been raised from Rs 3 lakh to Rs 25 lakh.
