New Tax Regime: The government has given a big relief to the taxpayers who have opted for the new tax regime. Now there will be no tax on income above Rs 7 lakh.
For this, amendments have been made in the Finance Bill. In the amendment, it has been provided that persons earning income slightly more than the tax free income of Rs 7 lakh will have to pay tax only on the additional income.
The Lok Sabha has approved the Finance Bill 2023. In this, some relief has been given to taxpayers under the new tax regime through amendment. The new tax regime will come into effect from 1 April.
These taxpayers will get relief
Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7 lakh, then he would not have to pay any tax. But if the income is Rs 7,00,100, then tax of Rs 25,010 has to be paid on it. Due to this additional income of Rs 100, taxpayers have to pay tax of Rs 25,010.
That is why it has been proposed to give a minor relief so that the tax paid by the person should not exceed the increased income from tax free income of Rs 7 lakh. In this case, the income in excess of Rs 7 lakh is Rs 100, so tax should also be levied on the same amount.
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.
Income tax free up to Rs 7 lakh
In the budget for the financial year 2023-24, it was announced that taxpayers adopting the new tax regime, whose annual income is up to Rs 7 lakh, will not have to pay tax. Experts believe that this step was taken to motivate the taxpayers of the salaried category to adopt the new tax regime.
No exemption on investment in new tax regime
No exemption is given on investment in the new tax regime. 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 how much taxpayers with income above Rs 7 lakh will be eligible for this relief. Tax experts have told according to the calculation that individual taxpayers whose income will be up to Rs 7,27,777 can get the benefit of this provision.
