Budget 2023- Key points of taxation- Old vs. New tax regime | The Union budget for 2023 was
presented in Parliament today, on February 1, 2023, the Finance Minister proposed five important
announcements for taxpayers:
1. Zero taxes, up to Rs of income. 7 lakhs (after U/S 87A discount)
2. Six rental plates and new tax rates
3. Standard deduction of Rs. 52,500/- for salary earners of Rs. 15.5 lakhs or more.
4. Surcharge on Income greater than 2 Cr 25% instead of 37%
5. The discount for paid leave of up to 10 months of average salary, at the time of retirement in the case of an employee (who is not an employee of the Central Government or the State Government), is exempt in accordance with subsection (ii) of clause (10AA) of article 10 of the Income Tax Law in the notified measure.
Note: ALL THE PREVIOUS CHANGES (Sr. 1 TO Sr.4) ONLY APPLY TO THE NEW INCOME TAX REGIME, THERE ARE NO CHANGES TO THE OLD INCOME TAX REGIME. This means that you can benefit from the above changes if you select the new tax regime. Zero tax under the old tax regime, up to Rs. 5 lakhs (after U/S 87A discount).
Non-alteration of the table and rate of Income Tax in the old tax regime. No change in the standard deduction for a salaried person with an income of Rs. 15.5 lakhs or more if you select the old tax regime.
Some more important changes: the standard deduction of Rs.50,000/- for salaried persons, and the family pension deduction of up to Rs.15,000/- is currently only allowed under the old regime.
New personal income tax regime as a standard tax regime. However, citizens will continue to have the option of benefiting from the old tax regime.
New Tax Regime as an alternative to the Old Tax Regime for Individuals and HUFs. Since the Old Tax Regime is optional by all means, the taxpayer now has the option to choose between the New and the Old Tax Regime after a careful comparison supported by facts and figures.
Income tax rates in the new tax regime and in the old tax regime:
The above table clearly shows that the new tax regime has proposed lower tax rates, for income segments up to Rs 15 lakh, but you should remember that the proposed lower tax rates will apply only if you are willing to forgo exemptions and deductions. provided. in various provisions of the Income Tax Law of 1961. This means that, by opting for the New Tax Regime, you must waive some exemptions and deductions provided for in Chapter VI A of the Law that grants deductions under art. . 80. Even the deduction of interest on the mortgage loan, under the terms of art. 24(b) will be rejected.
Some of the deductions and exemptions that you will not have in the new regime
The Ministry of Finance expects that four out of five Income Tax payers will switch to the new tax regime. It analyzed the income and investment data of 57.8 million taxpayers and found that 69% would prefer to save on taxes under the new system.
Another 20% may want to switch to avoid the hassle and red tape involved in tax planning. A taxpayer who takes various exemptions and deductions, such as the housing allowance and Section 80C deductions, will not be able to benefit from the change to the new system.
The taxpayer may make the choice based on his economic situation and what is most appropriate from the point of view of tax planning. The budget tried to put more money in the hands of taxpayers by reducing incentives to save. Section 80C forces people to save, and they will be withdrawn from saving if there is no tax incentive.
The momentum appears to be geared towards spending rather than focusing on long-term financial security for taxpayers. A taxpayer who opts for the new tax regime and forgoes tax breaks may end up spending money instead of using it for financial security.
He doesn't really need to do an elaborate calculation to know which regimen to choose. The answer is quite yes.
Anyone who claims tax exemptions and deductions is more than ceded under the old and new tax regime
Feature of this Excel Utility:-
1) This
Excel utility prepares and calculates your income tax as per the New Section
115 BAC (New and Old Tax Regime)
2) This
Excel Utility has an option where you can choose your option as a New or Old Tax
Regime
3) This
Excel Utility has a unique Salary Structure for Government and Non-Government
Employees Salary Structure.
4) Automated
Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the
F.Y.2000-01 to F.Y.2023-24 (Update Version)
5) Automated
Income Tax Revised Form 16 Part A&B for the F.Y.2023-24
6) Automated
Income Tax Revised Form 16 Part B for the F.Y.2023-24
