POSTED BY February 6, 2023 COMMENTS (4)ON
Today we will be highlighting the important points from the budget 2023 that would be most relevant for the salaried people.
So first thing to know is that the old tax slabs remain unchanged. The slabs are same like last year which are as follows
The taxation slabs got better in the new tax regime, which are as follows. The taxation got better for middle class and all the people who will choose new tax slabs will pay lower tax. Here are the new and previous slabs
Earliar, the standard deduction of 50,000 was available only for the old tax slab, but in this budget its also extended to the new tax regime. Which means that one can directly reduce their income by 50,000 before finding the taxable salary.
Its time to cheer up, as one will not be paying any income tax if the taxable salary is upto 7 lacs. This simply means that a person earning upto 7.5 lacs will not pay income tax because there will be standard deduction of 50,000 now which will make sure you come under that 7 lacs limit. here is an example where we show
Based on the information above, when does it make sense to choose between new and old regime?
When to choose New Tax Regime?
When to choose old tax regime?
Old Tax Regime will most likely get killed !
Govt has made its mind and aiming to move towards the simple tax structure with minimal compliances. In future there will be no 80C , HRA, 80D , home loan interests or any kind of deductions. Slowly New Tax Regime will be made attractive and old tax regime will be abolished.
The senior citizens will feel extremely happy after this amendment as the limit in Senior Citizen Saving Scheme has now increased to 30 lacs which was earlier 15 lacs. The current interest rate is 8% for the Jan-March 2023 quarter
This clearly shows a glimpse that this budget was in favor of the salaried class. National Savings Monthly Income Account the previous limits have increased.
Now one will not have to pay any income tax when they get the leave encashment amount upto Rs 25 lacs at the time of retirement or leaving their job. This amount was set at Rs 3 lacs till date which was set long back and was very low. So if one gets 40 lacs as leave encashment, then there wont be any tax upto Rs 25 lacs and rest 15 lacs will be taxable.
Taking a foreign tour package or investing abroad will increase one cashflow, as there is a 20% TCS rate now. which means that you have to pay an extra 20% money which will be deposited as advance tax from your side to govt when you make any high amount transactions which sends money to foreign. This is applicable only when the amount is more than 7 lacs.
Below were the slabs ..
Note that this TCS amount is not the TAX, but advance tax, which means that at the end of the year you can adjust it with your total tax payable or claim it back by filing a refund in your ITR.
All life insurance policies proceeds as income/maturity will be now be taxable if aggregate premium paid per year by the person is more than 5 lacs. Aggregate premium means total of the premium paid in a year by the person in his name from all kind of insurance policies
Till now there was no limit on the capital gains exemption under sec 54 and 54F, which means that you could buy another property with all the capital gains and just not pay any tax. But now you can only do this till 10 cr.
This is anyways going to impact only super HNI who deal in properties worth multi crores.
Let us know if you have any query on budget 2023. We hope you got a fair idea on all the changes made.
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