Starting on April 1st, 2023, there will be changes to the tax rates that taxpayers must pay on their own income and income from other sources. Nirmala Sitharaman, the finance minister, unveiled significant reforms in Budget 2023 for the tax-paying, hardworking middle class. There are some essential details one must know about the new rules.
New income tax regime
The new income tax regime will take over as the default tax system on April 1, 2023.
Tax rebate limit raised
The increase in the tax rebate cap from 5 to 7 lakhs means that individuals with incomes under 7 lakhs do not need to make any investments; their whole income is tax-free regardless of the number of investments they make.
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Life Insurance Policies
From the start of the new fiscal year, or 1 April 2023, the proceeds from life insurance premiums beyond the annual premium of 5 lakhs would be taxed.
Standard deduction
The standard deduction would be extended to the new tax regime for pensioners. Any salaried individual making at least 15.5 lakh rupees will gain 52,500 rupees.
Benefits to senior citizens
The Senior Citizen Savings Scheme's maximum deposit limit would rise from 15 lakhs to 30 lakhs. The monthly income scheme's maximum deposit limit would rise from 4.5 lakhs to 9 lakhs for single accounts and from 7.5 lakhs to 15 lakhs for combined accounts.
