‘IT rebate hiked to income of Rs 7 lakh’

Finance Minister Nirmala Sitharaman today proposed to increase the tax rebate to Rs 7 lakh under New Tax Regime. This means no tax will be levied on income up to Rs 7 lakh under New Regime. Presenting the Union Budget for 2023-2024 in the Parliament today, Nirmala Sitharaman said that the New Tax Regime will be the default tax regime. However, citizens will continue to reap the benefits of Old Regime. Standard Deduction under New Tax Regime for individuals with income up to Rs 15 lakh will be Rs 52,400.Currently, individuals have the choice of paying tax under the new slab with lower rates but foregoing deductions or continue paying tax under the existing tax laws and claiming the applicable exemptions. There are 7 income slabs that are available under the new tax regime. According to it, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh have to pay 5 percent tax. Income between Rs 5 and 7.5 lakh is taxed at 10 percent, while those between Rs 7.5 and 10 lakh at 15 percent.Those earning between Rs 10 and 12.5 lakh have to pay tax at the rate of 20 percent, while those between Rs 12.5 and Rs 15 lakh have to pay at the rate of 25 percent. Income above Rs 15 lakh is taxed at 30 percent.