Just one thing that now the salaried class looks forward to when it comes to the budget is the income tax incentive. When delivering Union Budget 2023-24 on 01st February, Finance Minister Nirmala Sitharaman adjusted the slabs to offer some relief to the middle class.
During the presentation of Budget 2020, FM Sitharaman said that “It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to ₹7 lacks.”
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Budget 2023: Old Vs New Income Tax Slab Rates
Listed below are the new and old income tax slab rates in the proposed budget for 2023-24:
New Income Tax Slab Rates
- No tax will be charged on income up to 3 lakh rupees.
- Income between 3-6 lakh rupees would indeed be taxed at 5%.
- Income between 6 to 9 lakh rupees would indeed be taxed at 10%.
- Income between 9 to 12 lacks at 15%
- Earnings of 12-15 lakh at a 20% tax rate
- Income of 15 lacks or over will also be taxed at 30%.
| Income Tax Slab Rates | Old Tax Regime | New Tax Regime |
|---|---|---|
| 0-3 lakh | NIL | NIL |
| 3-6 lakh | 5% | NIL (Increased income threshold for a rebate of income tax from INR 5 lakh to INR 7 lakh) |
| 6-9 lakh | 10% | 10% |
| 9-12 lakh | 15% | 15% |
| 12-15 lakh | 20% | 20% |
| Above 15 lakh | 30% | 30% |
Old Income Tax Slab Rates
- Both regimes exclude income up to INR 2.5 lakh from taxes.
- Income between 2.5 and 5 lakh rupees is taxed at 5% under both the old and new tax regimes.
- Under the prior regime, personal income ranging from 5 lacks to 7.5 lacks was taxed at a rate of 15%.
- In the prior regime, income between 7.5 lacks and 10 lacks was taxed at a rate of 20%.
- Under the previous regime, personal income in excess of Rs 10 lakh was taxed at a rate of 30%.
Since 2014, there has not been a modification to the income tax slabs rates. The standard personal tax exemption threshold last underwent an update in 2014. During the presentation of the 2020 budget, FM Sitharaman launched a new income tax system. The new tax system is still a choice for taxpayers, though.
