Don't get confused with Budget 2023 proposals; These are income tax slabs to save tax for current FY 2022-23 For the financial year 2022-23 (ending on March 31, 2023), the income tax slabs that will be applicable for your incomes earned between April 1, 2022, and March 31, 2023, will be the ones announced in the previous budget
After the Union Budget 2023 announcements, many individual taxpayers are likely to wonder if they should make use of the new income tax slabs under the new tax regime to save tax in the current financial year, 2022-23 (ending on March 31, 2023). If you are thinking on the same lines, you are wrong.The budget announced changes in the new tax regime to make it attractive for individuals. However, the proposals announced by the finance minister on February 1, 2023, are yet to be passed by Parliament. Hence, they are just proposals and not yet laws. Once these proposals are passed by Parliament, they will come into effect from the financial year 2023-24.
The financial year 2023-24 will start from April 1, 2023. The new income tax slabs under the new tax regime will be applicable for the incomes earned between April 1, 2023, and March 31, 2024. Thus, salary, interest incomes and any other incomes earned between April 1, 2023, and March 31, 2024, will either be taxed at the new income tax slabs under the new tax regime or the old tax regime (depending on the tax regime opted).
For the financial year 2022-23 (ending on March 31, 2023), the income tax slabs that will be applicable for your incomes earned between April 1, 2022, and March 31, 2023, will be the ones announced in the previous budget. The Union Budget 2022 did not make any changes in the income tax slabs. Hence, you need to consider the income tax slabs for FY 2022-23 to calculate income tax outgo on the incomes earned.
What is the income tax slabs for current FY2022-23?
Given below are the income tax slabs that will be applicable for the financial year 2022-23. For the current financial year, salaried individuals can continue with the old tax regime and claim tax deductions and exemptions that are applicable to them. Else, they can opt for the new tax regime by taking advantage of the lower tax rates and foregoing eligible tax deductions and exemptions.
If you are opting for the new tax regime in FY 2022-23, the applicable income tax slabs will be as follows:
Income tax slabs (In Rs)
Income tax rate (%)
From 0 to 2,50,000
0
From 2,50,001 to 5,00,000
5
From 5,00,001 to 7,50,000
10
From 7,50,001 to 10,00,000
15
From 10,00,001 to 12,50,000
20
From 12,50,001 to 15,00,000
25
15,00,001 and above
30
However, if an individual wishes to continue with the old tax regime and claim tax deductions and exemptions (such as Section 80C, 80D, HRA tax exemption, standard deduction, etc), the income tax slabs that will be applicable to their income depends on the age of the individual.
Under the old tax regime, the basic exemption limit depends on the age of an individual. For individuals below 60 years, the basic exemption limit is of Rs 2.5 lakh. For senior citizens (60 years and above but below 80 years), the basic exemption limit is of Rs 3 lakh. For super senior citizens (aged 80 years and above), the basic exemption limit is of Rs 5 lakh.
Income tax slabs for individuals (below 60 years)
Income tax slabs (In Rs)
Income tax rates (%)
From 0 to 2,50,000
0
From 2,50,001 to 5,00,000
5
From 5,00,001 to 10,00,000
20
From 10,00,001 and above
30
Income tax slabs for senior citizens (60- 80 years)
Income tax slabs (In Rs)
Income tax rates (%)
From 0 to 3,00,000
0
From 3,00,001 to 5,00,000
5
From 5,00,001 to 10,00,000
20
From 10,00,001 and above
30
Income tax slabs for super senior citizens (80 years and above)
Income tax slabs (In Rs)
Income tax rates (%)
From 0 to 5,00,000
0
From 5,00,001 to 10,00,000
20
From 10,00,001 and above
30
What are the changes announced in the new tax regime?
Given below are the changes announced in the new tax regime. These changes will be applicable for the incomes earned between April 1, 2023, and March 31, 2024.
a) Basic exemption limit proposed to be hiked to Rs 3 lakh from Rs 2.5 lakh
b) Income tax slabs and rates have been revised. The income tax slabs have been reduced from 6 to 5
c) Standard deduction of Rs 50,000 has been introduced
d) Rebate under Section 87A has been extended from taxable income of Rs 5 lakh to Rs 7 lakh.
e) The new tax regime has been made default tax regime. Hence, unless an employee specifically opts for the old tax regime, the income tax liability will be calculated using the new tax regime.
f) Highest surcharge rate has been revised from 37% to 25%
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This story originally appeared on: India Times - Author:Faqs of Insurances
