Zero tax for annual income up to 7 lakhs under new scheme – Tax slab

Subject :Economy

Section :Fiscal Policy

Concept :

The central government made a much-awaited mega announcement on increasing the income level up to which no income tax is payable: ₹ 7 lakh a year from the 2023-24 financial year. It was Rs 5 lakh so far.
This change is only for those who choose the New Tax Regime.
Tax surcharges of the taxpayers in the highest tax bracket were reduced from 37% to 25%.
Also, Finance minister in her budget for 2023-24 allowed a standard deduction of 50,000 under the new tax regime.
After listing out the slabs, the minister also announced that the Old regime — which has higher tax rates but several exemptions — will only be available on request now, and the New regime will thus be considered the default system for everyone.

Revised Tax Slab

A five-slab structure will apply now under the New regime, also raising the no-tax slab by ₹ 50,000.
Income between ₹ 0-3 lakh will have no tax; it was zero to ₹ 2.5 lakh earlier.
From then on:
Income part from ₹ 3 lakh and 6 lakh will be taxed at 5 per cent;
Rs 6 lakh to ₹ 9 lakh, at 10 per cent;
Rs 9 lakh to 12 lakh, 15 per cent;
Rs 12 lakh to 15 lakh will attract a 20-per-cent tax; and
The part of income going above ₹ 15 lakh will be taxed at 30 per cent.
The minister also brought down the highest applicable tax rate in India after surcharges, from 42.7 per cent to 39.
Rates and slabs under the Old Tax Regime remain unchanged.