Income Upto ₹7 Lakh Exempted From Tax In New Tax Regime; Check Revised Tax Slabs Here

Personal Income Tax: "The new tax rates are 0 to Rs 3 lakhs - nil, Rs 3 to 6 lakhs - 5%, Rs 6 to 9 Lakhs - 10%, Rs 9 to 12 Lakhs - 15%, Rs 12 to 15 Lakhs - 20% and above 15 Lakhs - 30%, " says FM Nirmala Sitharaman

Written by: Analiza Pathak Edited by: Analiza Pathak

Updated: February 1, 2023, 2:02 PM IST

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Budget 2023: Income Tax Slab Revision

Income Tax Slab Revision LIVE: Finance Minister Nirmala Sitharaman has proposed to increase the tax rebate to Rs 7 lakh under New Tax Regime. This means no tax will be levied on income up to Rs 7 lakh under New Regime. FM Nirmala Sitharaman says that the New Tax Regime will be the default tax regime. However, citizens will continue to reap the benefits of Old Regime. Standard Deduction under New Tax Regime for individuals with income up to Rs 15 lakh will be Rs 52,400, says FM

Income Tax Slab Revision: BIG Decision By FM Sitharaman 

1. Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime
2. I introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 Lakhs. I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs
3. Personal Income Tax: “The new tax rates are 0 to Rs 3 lakhs – nil, Rs 3 to 6 lakhs – 5%, Rs 6 to 9 Lakhs – 10%, Rs 9 to 12 Lakhs – 15%, Rs 12 to 15 Lakhs – 20% and above 15 Lakhs – 30%, ” says Union Finance Minister Nirmala Sitharaman
4. Rs 50,000 standard deduction to taxpayers under the new regime, where assessees cannot claim deductions or exemptions on their investments.
5. She also tweaked the concessional tax regime, which was originally introduced in 2020-21, by hiking the tax exemption limit by Rs 50,000 to Rs 3 lakh and reducing the number of slabs to five.

 Check New Tax rates under New Regime

Currently, individuals have the choice of paying tax under the new slab with lower rates but foregoing deductions or continue paying tax under the existing tax laws and claiming the applicable exemptions. There are 7 income slabs that are available under the new tax regime. According to it, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh have to pay 5 percent tax. Income between Rs 5 and 7.5 lakh is taxed at 10 percent, while those between Rs 7.5 and 10 lakh at 15 percent.

Those earning between Rs 10 and 12.5 lakh have to pay tax at the rate of 20 percent, while those between Rs 12.5 and Rs 15 lakh have to pay at the rate of 25 percent. Income above Rs 15 lakh is taxed at 30 percent.

The scheme, however, has not gained traction as in several cases it resulted in higher tax burden. With effect from April 1, these slabs will be modified as per the Budget announcement.