New Income Tax Relief , Income to be Taxed above 7 Lakh only in New Tax Regime
The government has given a big relief to the taxpayers who have opted for the new tax regime. For this, amendments have been made in the Finance Bill. In the amendment, it has been provided that persons earning income slightly more than the tax free income of Rs. 7 lakh will have to pay tax only on the additional income.
The Lok Sabha has approved the Finance Bill 2023. In this, some relief has been given to taxpayers under the new tax regime through amendment. The new tax regime will come into effect from 1 April, 2023.
Explaining the provision, the Finance Ministry said that under the new tax regime, if a taxpayer has an annual income of ₹7 lakhs, then he would not have to pay any tax. But if the income is ₹7,00,100, then tax of ₹25,010 has to be paid on it. Due to this additional income of ₹100, taxpayers have to pay tax of ₹25,010. That is why it has been proposed to give a minor relief so that the tax paid by the person should not exceed the increased income from tax free income of ₹7 lakhs. In this case, the income in excess of ₹7 lakh is ₹100, so tax should also be levied on the same amount.
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 ₹7 lakhs, will not have to pay tax. Experts believe that this step was taken to motivate the taxpayers of the salaried category to adopt new tax regime.