New Income Tax regime to benefit middle class, increase disposable income

Finance Minister Nirmala Sitharaman said on Saturday that the new income tax regime would benefit the middle class and increase disposable income. Tax slab changes were introduced earlier this month as the Finance Minister tabled the FY24 Budget before the parliament. 

Talking to reporters after the customary post-Budget address to the central board of RBI, she said it is not necessary to induce individuals to invest through government schemes but give him an opportunity to make a personal decision regarding investments.

The rebate limit in the new tax regime has been increased to ₹7 lakh, and the tax slabs reduced to five. The FM had said that no tax would be levied on annual income of up to ₹7 lakh.

Under the new tax bracket, income between ₹3-6 lakh would be taxed at 5% while those earning between ₹6-9 lakh will be taxed at 10%. Those in the ₹9-12 lakh bracket will incur 15 % tax while those earning between ₹12-15 lakh will be taxed at 20%. Income of ₹15 lakh and above will be taxed at 30%.

Budget 2023 indicates that individuals will not have to pay taxes fi the taxable income does not exceed ₹7 lakh. Combined with the rebates available under 87A of the Income Tax act and the standard deduction of ₹50,00 to salaried individuals and pensioners, people falling into these categories would not have to pay any tax if their income is less than ₹7.5 lakh.

Sitharaman also said that India was in discussions with G20 nations for designing a common framework. 

Answering a question on the Adani Group crisis, the minister said, “Indian regulators are very, very experienced and they are experts in their domain. The regulators are seized of the matter and they are on their toes as always not just now.”

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