Tax exemption under the new tax system: After many years in the financial year 2023-24, the government has given direct exemption regarding income tax slab. Taxpayers whose annual income is less than Rs 7 lakh can save tax on their entire income in the new tax regime. of which
To make the new tax regime attractive, the government has increased the tax exemption limit to Rs 7 lakh. It is a matter of great relief for the employed and middle class people. Those whose annual income is less than Rs 7 lakh can save tax on their entire income in this arrangement. But, you will not believe if I tell you that this range is not Rs 7 but Rs 7.5 lakh.
In the financial year 2023-24, after many years, the government has given direct exemption regarding income tax slab. The new tax regime may have come into effect two years ago, but in true sense its days are over. In the budget, it has been announced to implement the new tax system by default. Till now the old tax system was applicable by default. This means that if you no longer tell your HR which regime to choose, then by default your income tax calculation will start with the new regime. If you want to pay tax from the old system, then you must first inform your employer about it.
who will benefit
When the Finance Minister gave information about personal tax during the budget speech, he made income tax-free up to Rs 7 lakh in the new tax system. Earlier this limit was Rs 5 lakh. The confusion is that if the income of Rs 7 lakh is made tax free, then how much tax will have to be paid by those earning Rs 7.5 lakh. The government increased the tax exemption limit from Rs 5 lakh to Rs 7 lakh and also introduced a standard deduction of Rs 50,000. In this way, the total income up to Rs 7.5 lakh became tax free.
If earning is more than 7.5 lakhs
If someone’s annual income is more than Rs 7.5 lakh and he is adopting the option of savings, then he should stay away from the new tax regime. Actually, in the old system, tax exemption is given only up to 5 lakhs. Tax is saved in the form of investment on more than this income.
Those who are not able to invest in rising inflation, they should adopt the new system. In this, even after taking tax exemption of 7.5 lakhs, if your income is more, then the tax rate on it will be less. Apart from this, tax up to 3 lakh has been kept zero in the new system, due to which you will be able to save several thousand in the form of tax.
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