Income Tax Slab Change: Big update for taxpayers! Income tax slab may be changed in Budget 2024, know details here

 

New income tax vs old income tax slabs: In the budget presented on 1 February 2023, Finance Minister Nirmala Sitharaman had made some changes in the tax slabs. It is expected that in the coming year too, when the full budget is presented, some changes in the income tax slabs are possible.

New income tax vs old income tax slabs: Finance Minister Nirmala Sitharaman will present the country’s budget on February 1. But, this is an election year so the budget will be interim. The Finance Minister himself has made it clear that this budget is going to be voted on account. The full budget is not presented in an election year. The new government formed after the election results presents the full budget, which is usually presented after two months of the results.

The general public waits for announcements like tax exemption in the budget. In the budget presented on 1 February 2023, Finance Minister Nirmala Sitharaman had made some changes in the tax slabs. It is expected that in the coming year too, when the full budget is presented, some changes in the income tax slabs are possible. But, before the end of the financial year, one should understand the new and old tax slab rates.

New Vs Old Income Tax Regime

1- Which tax slab is right for you?

There is an opportunity to choose the tax slab at the beginning of the financial year. But, if something goes wrong, there is time for rectification at the end of the financial year. In such a situation, if there is any confusion regarding new and old slabs, then you can understand now. The most important thing is which slab is the perfect fit for you

2- How much benefit is there in the new tax regime?

After the changes made in Budget 2023, in the new tax regime, there is no tax on taxpayers whose income tax is up to Rs 7 lakh. The new tax regime is a good option for people in this income bracket. Because, apart from income of Rs 7 lakh, standard deduction of Rs 50 thousand is also available. Overall, no tax will have to be paid up to Rs 7 lakh 50.

3- Tax slabs in the new tax regime

– No tax on income up to ₹3 lakh
– 5% tax on income up to ₹3-6 lakh (tax rebate under section 87A)
– 10% tax on income up to ₹6-9 lakh
– ₹9- 15% tax on income of Rs 12 lakh
– 20% tax on income of ₹12-15 lakh
– 30% tax on income of ₹15 lakh or above

4- Tax slabs in the old tax regime

– Basic exemption tax exemption is available on income up to Rs 2.5 lakh
– 5 percent tax on income from ₹ 2.5 to ₹ 5 lakh
– 15 percent tax on income from ₹ 5 lakh to ₹ 7.5 lakh
– ₹ 7.5 lakh to ₹ 10 lakh 20 percent tax on income
– 30 percent tax is imposed on income above Rs 10 lakh.

5- Tax exemption is available on investment

There is an opportunity to avail tax exemption in old tax slabs. Tax exemption can be claimed through investment in this. In this, tax exemption is available on investment in sections like 80C, 80D. Experts believe that for taxpayers who pay house rent or home loan, the old tax system is still better.

Rebate in 87A increased?

In the last budget, the rebate available under Section 87A was increased for income up to Rs 7 lakh. Tax rebate of Rs 5 lakh was available at Rs 12500, it was increased to Rs 25000 on income of Rs 7 lakh. This means that taxpayers who choose the new tax regime will not have to pay any tax on income up to Rs 7 lakh.