Income Tax Union Budget 2023: Relief for salaried individuals soon? Revision in tax slabs under new Income Tax regime likely

Income Tax Union Budget 2023: The government is working to make the new tax regime more attractive and it is learnt that the Ministry of Finance is planning to change the income tax slabs under the regime. The ministry could hike the taxable income exemption from the existing limit of Rs 2.5 lakh to Rs 3.5 lakh or Rs 4 lakh.

New Delhi: Modi government’s last Union Budget before the 2024 Lok Sabha Elections could come as a major relief for taxpayers and salaried individuals. After announcing no change in the tax slabs in the last few Budgets, the government could announce revisions in the income tax slabs.

Announcements concerning the new Income Tax Regime, announced by Finance Minister Nirmala Sitharaman in 2021, could be made to make it more attractive. While the tax amount is less in the new Income Tax Regime, it doesn’t offer any exemption benefits which is why the regime hasn’t found many takers.

In view of this, the government is working to make the new tax regime more attractive and ET Now has learnt that the Ministry of Finance is planning to change the income tax slabs under the regime. Sources have indicated that the ministry could hike the taxable income exemption from the existing limit of Rs 2.5 lakh to Rs 3.5 lakh or Rs 4 lakh.Related News

Budget 2023: 20 per cent Income Tax for salaried persons under Rs 20 lakh per annum?Union Budget 2023 income tax alert: Revisions to new tax regime expected- Could this save you thousands in taxes?

Current tax slabs under new Income Tax regime

TAXABLE INCOMETAX RATE
Rs 2.5 lakh to Rs 5 lakh5%
Rs 5 lakh to Rs 7.5 lakh5%
Rs 7.5 lakh to Rs 10 lakh15%
Rs 10 lakh to Rs 12.5 lakh20%
Rs 12.5 lakh to Rs 15 lakh25%
Rs 15 lakh and above30%

Changes in New Income Tax Regime Structure

It is being recommended that to keep 20 per cent tax limit for individuals having taxable income of up to Rs 20 lakh under the new tax regime. This move could invite more takers to the scheme, that has, so far, invited abysmal response. The recommendations were made by several industry bodies during pre-budget consultations.

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