The union budget for 2023 has been presented on February 1 by Finance Minister Nirmala Sitharaman, an increase in the income tax rebate limit has been announced under the new income tax system from 5 lakh to 7 lakh. This means that people earning up to Rs 7 lakhs annual salary won’t have to pay any income tax.
The FM said in the Parliament, “Currently, those with income up to Rs 5 lakh do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to Rs 7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs 7 lakh will not have to pay any tax.”
Here are the six income tax slabs under the New Tax Regime –
Rs 0-3 lakh: Nil
Rs 3-6 lakh: 5 per cent
Rs 6-9 lakh: 10 per cent
Rs 9-12 lakh: 15 per cent
Rs 12-15 lakh: 20 per cent
Over Rs 15 lakh: 30 per cent
After the tax revisions in the new tax regime, there are big savings in town for the salary class people in the country. Under the New Income Tax Regime, all salaried employees will be able to save a major chunk of their taxes.
Annual salary Rs 7 lakh – No tax
Annual Salary Rs 9 lakh: Rs 15,000 savings
Annual salary Rs 12 lakh: Rs 24,000 savings
Annual salary Rs 15 lakh: Rs 37,500 savings
How to save income tax on salary?
After the finance minister increased the rebate under the new income tax regime, taxpayers with an annual income of up to Rs 7 lakh will save Rs 33,800 in taxes.
- Invest in tax savings schemes such as Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Savings Certificate (NSC), and Senior Citizen Savings Scheme (SCSS).
- Make use of Section 80C benefits Several tax deductions that are permitted by Section 80C of the Income Tax Act from taxable income.
- Seek out tax deductions on home loans. If you have a home loan, you are eligible for tax deductions made for interest and principal from your taxes.
- Invest in a pension fund like the National Pension System (NPS)
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