Budget 2023: The new year has started. After a few days, the budget session will start and on 1 February 2023, Finance Minister Nirmala Sitharaman will present the budget in Parliament.
The business class including the employed, farmers have various expectations from this budget. From the Ministry of Finance, from the first budget of independent India till now, tax payers have been given various facilities as well as tax slabs have been changed from time to time. New tax regime and old regime have been started by the Modi government for the tax payers.
Income tax exemption for annual income up to 2.5 lakh
. There is also a big difference in the tax slabs of both the regimes. According to a figure, most of the tax payers choose the old regime only. In both the regimes, annual income up to Rs 2.5 lakh is exempted from income tax. But there is a tax of 5 percent on income from 2.5 lakh to 5 lakh. In the old regime, 20 percent tax has to be paid on income between Rs 5 lakh to Rs 10 lakh annually. An annual income of 10 to 15 lakhs or more is taxed at 30 percent.
Let’s talk today if your annual income is Rs 10 lakh and you live on rent. Apart from this, if you invest the entire Rs 1.5 lakh under Section 80C of Income Tax, then today we calculate your tax.
Here is the complete math
1. If your annual income is Rs 10 lakh, then after reducing the standard deduction of Rs 50,000 given by the Ministry of Finance, your taxable income reduced to Rs 9.50 lakh.
2. After this it is considered that you have saved up to Rs 1.5 lakh under Section 80C of Income Tax. In this you can claim Tuition Fee, LIC (LIC), PPF (PPF), Mutual Fund (ELSS) and EPF (EPF) etc. In this way your taxable income has come down to Rs.8 lakh.
3. On House Rent Allowance (HRA) up to one lakh rupees, you do not need to give the PAN card of the landlord. If you pay this much rent, then your taxable income comes down to Rs 7 lakh. You will have to pay tax on this amount.
4. Rs 12,500 was taxed at the rate of 5 per cent on income between Rs 2.5 lakh to Rs 5 lakh. After this, 40 thousand tax was done on the income of 5 to 7 lakhs at the rate of 20 percent. In this way, from 2.5 lakh to 5 lakh, the total tax was Rs 52,500.
5. Now on this you will have to pay cess at the rate of 4 percent, which is Rs.2,100. In this way, your total income tax on salary of 10 lakhs is Rs 54,600.
