Changes made in personal taxation in Budget 2023 applicable from 1st April 2023. 1. New tax regime made default tax regime for Individual, HUF, AOP (o
Changes made in personal taxation in Budget 2023 are applicable from 1st April 2023.
1. New tax regime made default tax regime for Individual, HUF, AOP (other than co-operative), BOI and AJP however old tax regime can also opt. For those persons having income under the head "profit and gains of business or profession" and having opted for old regime can revoke that option only once and after that, they will continue to be taxed under the new regime. For those not having income under the head "profit and gains of business or profession", options for the old regime may be exercised each year.
2. Rebate u/s 87A has been increased from 500000 (5 Lacs) to 700000 (7 Lacs) in New Tax Regime.
3. Standard deduction U/s 16(Ia) of Rs 50,000 to salaried individuals, and deduction from family pension up to Rs 15,000, is currently allowed only under the old regime. It is proposed to allow these two deductions under the new regime also.
4. Extending the benefit of standard deduction U/s 16(ia) to the new tax regime. Each salaried person with an income of Rs. 15.5 lahks or more will get a standard deduction of Rs. 52,500.
5. Encashment of earned leave up to 10 months of average salary, at the time of retirement in case of an employee (other than an employee of the Central Government or State Government), is exempt under sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act to the extent notified. The maximum amount which can be exempted is Rs. 3 lahks at present. It is proposed to issue a notification to extend this limit to Rs. 25 lahks.
2. Rebate u/s 87A has been increased from 500000 (5 Lacs) to 700000 (7 Lacs) in New Tax Regime.
3. Standard deduction U/s 16(Ia) of Rs 50,000 to salaried individuals, and deduction from family pension up to Rs 15,000, is currently allowed only under the old regime. It is proposed to allow these two deductions under the new regime also.
4. Extending the benefit of standard deduction U/s 16(ia) to the new tax regime. Each salaried person with an income of Rs. 15.5 lahks or more will get a standard deduction of Rs. 52,500.
5. Encashment of earned leave up to 10 months of average salary, at the time of retirement in case of an employee (other than an employee of the Central Government or State Government), is exempt under sub-clause (ii) of clause (10AA) of section 10 of the Income-tax Act to the extent notified. The maximum amount which can be exempted is Rs. 3 lahks at present. It is proposed to issue a notification to extend this limit to Rs. 25 lahks.
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