Changes to the Income Tax Beginning on April 1, 2023
Changes to the Income Tax Beginning on April 1, 2023: The New Income Tax Regime Will Be the Definitive Regime Beginning on April 1, 2023, the New Income Tax Regime will be the Definitive Regime.
Assessee can in any case pick old Expense system.
- The standard deduction for taxable income exceeding Rs.15.5 lakhs will be 52,500 if pensioners and salaried workers choose the new tax system.
- Under the new tax system, the limit for income tax refunds has been raised to seven lakh rupees. If a resident opts for the new tax system, the tax rebate limit will be seven lakh rupees. Therefore, a person whose income is less than 7 lakh does not need to make any investments in order to qualify for exemptions, and their entire income will be exempt from taxation, regardless of how much they invest.
- The standard deduction under the new tax regime Under the new tax regime, employees will be able to take a salary deduction of Rs. 50.000. Pensioners and salaried workers will gain from it. Each salaried individual with a pay of ₹15.5 lakh or more will benefit by ₹52,500.
- Changes to Income Tax Slabs for the New Tax Regime Under Section 115BAC The new tax rates are 0-3 lakh—nil; 3-6 lakh—5 percent; 6-9 lakh—10 percent; 12-15 lakh—15 percent; above 15 lakh—30 percent. 5) Leave Encashment Non-government employees are exempt from leave encashment up to a certain limit. 6) There is no LTCG tax benefit for specified mutual funds As of April 1, investments in specified debt mutual funds will be taxed as short-term capital gains. Previously, this limit was 3 lakh, but it has now been raised to 25 lakh. If you invest in these specific mutual funds on or after April 1, 2023, there will be no cost-indexation benefit.
- Market-Linked Debentures (MLDs) Beginning on April 1, 2023, investments in MLDs will be short-term capital assets.
- Life Insurance Policies will not be eligible for a cost-indexation benefit. Instead, the proceeds from life insurance premiums exceeding 5 lakh per year will become taxable on April 1, 2023, the first day of the new fiscal year. The ULIP (Unit Linked Insurance Plan) will not be subject to the new income tax rule.
- Benefits for Seniors The senior citizen savings scheme’s maximum deposit limit will be raised from 15 lakhs to 30 lakhs. The monthly income scheme’s maximum deposit limit will be raised from 4.5 lakhs for single accounts to 15 lakhs for joint accounts, respectively.
- Conversion of physical gold to e-gold receipt exempts from capital gains tax Conversion of physical gold to an Electronic Gold Receipt (EGR) and vice versa exempts from capital gains tax. This will come into effect on April 1, 2023.