1] New Income tax regime to be a default regime: New tax regime will take over as the primary tax regime on April 1, 2023. Tax assessors will still have the option of using the old tax Regime.
2] Tax rebate limit raised to Rs. 7 lakhs: Increase in the tax rebate cap from 5 to 7 lakh means that individual with incomes under 7 lakhs do not need to make any investments to qualify for exemptions.
3] Standard deduction: Standard deduction of Rs 50,000 that was offered to employees under the old tax regime remains unchanged. The finance minister stated that the standard deduction would be extended to the new tax regime.
4] LTA (Leave travel Allowance): The non- government workers are exempt from the leave encashment requirement. The limit is now Rs 25 lakhs.
5] No LTCG tax benefit on these Mutual Funds: Investments in debt mutual funds will be subject to short term capital gain tax beginning on April 1. Investors would lose the long-term financial advantage that had made such investment attractive.
6] Life Insurance Policies: With the start of the new fiscal year the proceeds from the LIC over the yearly premium of Rs 5 lakhs will be taxable.
7] Benefits to Senior Citizen: Senior Citizen Savings Scheme's highest limit will rise from Rs 15 lakh to 30 lakhs. The monthly income scheme's highest deposit limit will rise from 4.5 lakhs to 9 lakhs. for single accounts and from 7.5 lakhs to 15 lakhs for joint accounts.
8] Changes in Income Tax Slabs:
- 0-3 lakhs---------- Nil
- 3-6 lakhs---------- 5%
- 6-9 lakhs---------- 10%
- 9-12 lakhs--------- 15%
- 12-15 lakhs--------20%
- above 15 lakhs----30%
