The government on Friday gave some relief to the taxpayers who opted for the new tax regime. For this, the Finance Bill has been amended to provide that persons earning a little more than Rs 7,00,000 tax free income will have to pay tax only on the additional income. The Lok Sabha has approved the Finance Bill 2023. Through amendments in this, some relief has been given to the taxpayers under the new tax regime. The new tax regime will be applicable from 1 April.
No tax up to Rs 7,00,000
Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of Rs 7,00,000 then he does not have to pay any tax, but if the income is Rs 7,00,100 then it is Rs 25,010. Pay tax of Rs. With this additional income of Rs 100, taxpayers will have to pay tax of Rs 25,010. Therefore, a minor relief has been proposed, so that the tax payable by the individual does not exceed the income increased by the tax free income of Rs.7,00,000. In the above case, the income in excess of Rs.7,00,000 is Rs.100, so that amount should be taxed.
Finance Bill amended to provide relief to taxpayers
Sandeep Jhunjhunwala, partner, Nangia Andersen LLP, said the amendment in the Finance Bill has been made to provide some relief to individual taxpayers whose income is marginally higher than the tax free income. In the budget for the financial year 2023-24, it was announced that taxpayers adopting the new tax regime, whose annual income is up to Rs 7,00,000, will not have to pay tax. Experts believe that this step has been taken to motivate the taxpayers of the salaried class to adopt the new tax system. No exemption has been given on investment in the new tax regime.
who will get relief
Now the government has made up its mind to give some more relief to these taxpayers through amendment in the Finance Bill. However, the government has not specified to what extent taxpayers earning more than Rs 7,00,000 would be eligible for this relief. Tax experts have calculated that individual taxpayers with income up to Rs 7,27,777 can get the benefit of this provision.
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