- The new Income Tax regime will be the default tax regime unless we opted for an old regime. Other than businessman and professionals tax payers we can switch the option from old regime to new regime and vice versa every year.
- Basic Exemption limit under new regime is increased from Rs 2,50,000 to Rs 3,00,000
- Rebate under section 87A is increased from Rs 5 lakh to Rs 7 lakh ( under new tax regime)
TAX SLABS UNDER NEW REGIME FOR INDIVIDULAS U/S 115BAC
| Total Income ((Rs) | Till FY 2022-23 | Total Income ((Rs) | Till FY 2023-24 |
| Up to 2,50,000 | Nil | Up to 3,00,000 | Nil |
| 2,50,001- 5,00,000 | 5% | 3,00,001-6,00,000 | 5% |
| 5,00,001- 7,50,000 | 10% | 6,00,001-9,00,000 | 10% |
| 7,50,001- 10,00,000 | 15% | 9,00,001-12,00,000 | 15% |
| 10,00,001-12,50,000 | 20% | 12,00,001-15,00,000 | 20% |
| 12,50,001-15,00,000 | 25% | ||
| Above 15,00,000 | 30% | Above 15,00,000 | 30% |
- However for those who are eligible for new tax regime scheme are not eligible for deductions except the following:
- Standard Deduction of 50,000 Rs for salaried employees
- Family pension deduction U/S 57 :
Rs. 15,000 or1/3 of pension
(Whichever is lower)
- Under new tax regime , the highest surcharge of 37% on income above 5 crores is reduce to 25% which effectively reduces the overall tax rate
- The limit of Rs. 3 Lakh for tax exemption on leave encashment of non – government employees has been increased to Rs. 25 lakhs in Budget 2023.
- For life insurance policies issued on or after April 1, 2023, the tax exemption on maturity benefits under Section 10(10D) will be applicable if the aggregate premium paid by an individual is up to Rs. 5 lakhs
- Receipts from life insurance policies issued on or after 1-4-2023 shall be taxed as income from other sources, if the premium paid are above Rs. 5, 00,000 in a year. Exemption shall continue in the case of receipt on the death of insured person
- Threshold limit for presumptive taxation scheme section 44AD and 44ADA is increased threshold to Rs. 3crore and Rs. 75 lakhs, respectively. The increased threshold limit shall apply where at least 95%of receipts and payments be made through non-cash methods.
- New cooperatives that commence manufacturing till March , 2024 to get lower tax rate of 15%
- Manufacturing co-operative societies established on or after 1-4-2023 and beginning production on or before 31-3-2024 may pay tax at a reduced rate of 15%(plus 10%surcharge and cess)under the new tax regime of Section 115BAE, provided specified incentives or deductiosns are not claimed
- Winning from any online game shall be taxable at a rate of 30% (plus applicable surcharge and cess) under a new section 115BBJ
- Eligible start-ups can set off and carry forward the losses incurred during the 7 years of incorporation even in case of a change in shareholding, provided 100% of shareholders continue during the relevant period. The time limit of 7 years is increased to 10 years
- The rate of TCS on overseas tour package and select other cases increased from 5% to 20% , without any threshold benefit
- The threshold limit for TDS under section 194N is increased from Rs. 1 crore to Rs. 3 crore where recipient is a co-operative society.