Budget 2023: Income Tax rebate limit raised; check new tax regime here

Union Finance Minister Nirmala Sitharaman presented the last full-fledged budget of the second term of the Prime Minister Narendra Modi-led government. In the Income Tax section of Budget 2023, FM Sitharaman has proposed to increase the tax rebate from Rs 5 lakh to Rs 7 lakh under the New Tax Regime to provide relief to the taxpayers of the country.

She also proposed to change the tax structure in the new income tax regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 lakh.

“Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime,” FM Sitharaman said.

“I introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 Lakhs. I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs,” she said.

Revised tax slabs under new tax regime:

• Income of ₹0-3 lakh - Nil.
• Income above ₹3 lakh and up to ₹5 lakh will be taxed at 5 per cent.
• Income of above ₹6 lakh and up to ₹9 lakh will be taxed at 10 per cent the under new regime.
• Income more than ₹12 lakh and up to ₹15 lakh to be taxed at 20 per cent.
• Income above ₹15 lakh to be taxed at 30 per cent.

Yesterday, after the President Draupadi Murmu’s address to the joint-sitting of the Parliament, the Union Finance Minister had tabled the Economic Survey for the Financial Year 2022-23.

According to the survey, India’s economic recovery from the pandemic is complete and the economy is expected to grow in the range of 6% to 6.8% in the coming financial year 2023-24.