The government on Friday gave some relief to the taxpayers opting for the new tax regime. For this, by amending the Finance Bill, it has been provided that persons earning a little more than the tax-free income of Rs 7,00,000 will have to pay tax only on the additional income.
The Lok Sabha has approved the Finance Bill 2023. In this, through amendment, some relief has been given to the taxpayers under the new tax regime. The new tax regime will come into effect from April 1.
No tax up to Rs 7,00,000
Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7,00,000, he does not have to pay any tax, but if the income is Rs 7,00,100, then 25,010 Have to pay tax of Rs. Due to this additional income of Rs 100, the taxpayers have to pay tax of Rs 25,010. Therefore, a marginal relief has been proposed, so that the tax payable by the person should not exceed the increased income from the tax free income of Rs.7,00,000. In the above case, the income in excess of Rs.7,00,000 is Rs.100, so the same amount should be charged to tax.
Finance Bill amended to provide relief to taxpayers
Sandeep Jhunjhunwala, partner at Nangia Andersen LLP, said the amendment in the Finance Bill has been made to provide some relief to individual taxpayers whose income is marginally higher than the tax free income. In the budget for the financial year 2023-24, it was announced that the taxpayers adopting the new tax regime, whose annual income is up to Rs 7,00,000, will not have to pay tax. Experts believe that this step was taken to motivate the salaried class taxpayers to adopt the new tax regime. No exemption is given on investment in the new tax regime.
Who will get relief
Now the government has made up its mind to give some more relief to these taxpayers through amendment in the Finance Bill. However, the government has not mentioned to what extent taxpayers having income above Rs 7,00,000 would be eligible for this relief. Tax experts have calculated that individual taxpayers whose income is up to Rs 7,27,777 can get the benefit of this provision.
