- Date : 02/02/2023
- Read: 3 mins
New Tax rules presented by Nirmala Sitharam see six tax slabs reduced to five going forward.
Nirmala Sitharaman, India's Union Finance Minister, presented the Budget on February 1, 2023, and made several announcements regarding employment opportunities, income tax, personal finance, etc. Sitharaman concluded her speech with announcements on five changes relating to personal income tax. The government plans to increase its capital expenditure to $122.29 billion (10 trillion rupees) by 33% in the next fiscal year. The Indian Prime Minister wants to create more jobs before the general elections.
Sitharaman announced that the average income tax return processing time would be reduced to 16 days from 93 days. The Finance Minister announced that in cases of personal income tax, the following would be the tax slabs:
- Rs 0 - Rs. 3 lacs: NIL
- Rs. 3 lacs - Rs 5 lacs: 5%
- Rs. 6 lacs - Rs. 9 lacs: 10%
- Rs. 12 lacs - Rs. 15 lacs: 20%
- Above 15 lacs: 30%
CEO and Founder of "CLEAR," Archit Gupta, said the new rules would make IT returns easier, and the customers would get tax relief. The new rules would allow businesses having up to Rs. 3 crore turnover to get presumptive taxation. It is a simpler regime available under Sec. 44AD. Professionals can also opt for it if their receipts are up to Rs. 75 lacs.
It comes as a relief, and the filing becomes simpler. Professionals and businesses will now have to pay lower taxes. Capital gains for the property will have an Rs. 10 crores maximum exemption cap. Cap gain exemption benefits under Sec. 54 and 54G will be unavailable for over Rs. 10 crore cap gains.
Also Read: History of income tax in India.
SAG Infotech's MD, Amit Gupta, said it takes 24 hours to complete 45% of ITRs. He added that the Common ITR form would soon be available, and the IT grievance redressal system will enhance with the new rules. He said that income tax incentives for startups and businesses had been delayed by a year to 2024. 100 joint commissioners will handle Small Income Tax appeals. Also, startups can now carry forward the benefits they lost from seven to 10 years now. The new tax scheme sees the refund enhanced to Rs. 7 lacs, and the latest IT mechanism will be the default tax regime.
Assessors will be allowed to select the previous regime. Taxable income's standard deduction for pensioners and salaried will be on income over Rs .15.5 lacs of Rs. 52, 500. The new regime will have five income categories instead of six.