Union Finance Minister Nirmala Sitharaman on February 1 announced an increase in income tax rebate limit to Rs 7 lakh from Rs 5 lakh in the new tax regime.
''The income tax rebate has been extended on income up to Rs 7 lakh under the tax regime, up from Rs 5 lakh so far,'' the Finance Minister said while presenting the Union Budget 2023-24 in Parliament on February 1.
Sitharaman also announced that there will not be any new tax for income up to Rs 3 lakh.
She also proposed to change the structure of the personal income tax regime by reducing the number of slabs and increasing the tax exemption limit to Rs 3 lakh.
"The new tax rates are 0 to Rs 3 lakh - nil, Rs 3 to 6 lakh - 5 per cent, Rs 6 to 9 lakh - 10 per cent, Rs 9 to 12 lakh - 15 per cent, Rs12 to 15 lakh - 20 per cent and above Rs 15 lakh - 30 per cent, " she said during her speech in Parliament.
She further reminded that the government had introduced the new personal income tax regime with 6 income slabs, which start from Rs 2.5 lakh.
''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 lakh,'' she added.
The Finance Minister also informed that the average processing time for income tax returns has also been reduced from 93 days to 16 days.
As per FM, the government has also proposed to reduce the highest surcharge rate to 25 per cent from 37 per cent under the new tax regime.
''The Current tax rate in country is 42.74 per cent, among the highest in world. Budget 2023 proposes to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new Tax regime. This will result in the reduction of the maximum tax rate to 39 per cent," she said.
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