The Union Budget for 2023- 2024 was presented in the Lok Sabha by Finance Minister Nirmala Sitharaman on February 1, 2023. Here are 5 5 major announcements for the middle class:
1.Income Tax Rebate Limit Is To Be Raised In The New Tax Regime From Rs. 5 Lakhs To Rs. 7 Lakhs In both the new and old and tax regimes, the individuals who are with an income up to Rs.5 lakh will not have to pay any income tax. It has been proposed by the finance minister to increase the rebate limit to Rs. 7 lakhs in the new tax regime. Therefore, the individuals in the new tax regime, with an income up to Rs. 7 lakhs will not have to pay any tax under the tax regime.
2. New Tax Slabs introduced It has been announced by Finance Minister Nirmala Sitharaman that the Tax for income: 0-3 lakh – Nil 3-6 lakh – 5% 6-9 lakh – 10% 9-12 lakh – 20% 12- 15 lakh – 20% Above 15 lakh – 30% People who are earning income OF Rs 9 lakh a year will have to pay only Rs. 45000 a year as tax. That is 5% of their income or reduction of 25 percent from the Rs 60000 they were paying earlier.
3. The Proposal for the salaried class and the pensioners It has also been announced in respect of the salaried class and the pensioners including family pensioners, the finance minister has extended the benefit of standard deduction to the new tax regime. Each salaried individual with an income of Rs. 15.5 lakh or more will thus be standing of to the benefit by Rs.52,500 under the tax regime.
4. The Reduction In highest surcharge rate from 37 % to 25 % in the new tax regime In the personal income tax the fourth announcement regarding the highest tax rate which is 42.74 per cent. The same being among the highest in the world. It has been produced by the finance minister to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new tax regime. The same would be resulting in reduction of the maximum tax rate to 39 per cent.
5. The Leave Encashment The limit of Rs. 3 lakhs for tax exemption on leave encashment on retirement for the non-government salaried employees was last being fixed in the year 2002, when the highest basic pay in the government was Rs.30,000 per month. Therefore, in line with the increase in the salaries of the government, it has been proposed by the finance minister to increase the limit to Rs. 25 lakhs.
