5 income tax changes announced in Budget 2023

Finance Minister Nirmala Sitharaman announces increased income tax rebate of up to ₹7 lakh in new tax regime during Union Budget speech in parliament.

The rebate under section 87A of new income regime hiked to ₹7 lakh,” said FM while presenting Budget 2023.

Finance Minister announces 5 changes to income tax rules in 2023 Budget.

Tax rebate limit raised to Rs 7 lakh from ₹5 lakh

Changes in Income Tax slabs

0-3 lakh – nil
3-6 lk – 5%
6-9 lk – 10%
9-12 lk – 15%
12-15 lk – 20%
above 15 – 30%

New Income Tax regime to be default regime

Individuals earning 9 lakhs per year will only be required to pay 45,000 in taxes.

Budget 2023 proposes a reduction in the maximum tax rate, including surcharge, to 39% from 42.74%. The highest surcharge rate will be reduced from 37% to 25% in the new tax regime, leading to the decrease in the maximum tax rate.

The average processing time for income tax returns has been shortened from 93 days to 16 days, according to the Finance Minister.

The income tax structure in the country remained unchanged for the past 7 years, with the basic personal tax exemption limit last being revised in 2014.