Income Tax: Relief to taxpayers earning more than Rs 7,00,000 in the new tax regime


New Delhi: The federal government on Friday gave some reduction to the taxpayers choosing the brand new tax regime. For this, by amending the Finance Invoice, it has been offered that individuals incomes a bit greater than the tax-free revenue of Rs 7,00,000 should pay tax solely on the extra revenue. The Lok Sabha has permitted the Finance Invoice 2023. On this, by means of modification, some reduction has been given to the taxpayers below the brand new tax regime. The brand new tax regime will come into impact from April 1.

No tax as much as Rs 7,00,000

Explaining the availability, the Finance Ministry stated that below the brand new tax regime, if a taxpayer has an annual revenue of Rs 7,00,000, he doesn’t must pay any tax, but when the revenue is Rs 7,00,100, then 25,010 Must pay tax of Rs. As a result of this extra revenue of Rs 100, the taxpayers must pay tax of Rs 25,010. Subsequently, a marginal reduction has been proposed, in order that the tax payable by the particular person shouldn’t exceed the elevated revenue from the tax free revenue of Rs.7,00,000. Within the above case, the revenue in extra of Rs.7,00,000 is Rs.100, so the identical quantity ought to be charged to tax.

Finance Invoice amended to supply reduction to taxpayers

Sandeep Jhunjhunwala, accomplice at Nangia Andersen LLP, stated the modification within the Finance Invoice has been made to supply some reduction to particular person taxpayers whose revenue is marginally increased than the tax free revenue. Within the finances for the monetary 12 months 2023-24, it was introduced that the taxpayers adopting the brand new tax regime, whose annual revenue is as much as Rs 7,00,000, is not going to must pay tax. Specialists consider that this step was taken to encourage the salaried class taxpayers to undertake the brand new tax regime. No exemption is given on funding within the new tax regime.

New tax regime: From April 1, the funding restrict within the Senior Citizen Financial savings Scheme will enhance, know the way? Who will get reduction?

Now the federal government has made up its thoughts to present some extra reduction to those taxpayers by means of modification within the Finance Invoice. Nonetheless, the federal government has not talked about to what extent taxpayers having revenue above Rs 7,00,000 could be eligible for this reduction. Tax specialists have calculated that particular person taxpayers whose revenue is as much as Rs 7,27,777 can get the advantage of this provision.

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