- Under the new tax regime for the financial year 2023-24, the basic exemption limit has increased to Rs 3 lakh from Rs 2.5 lakh. The new tax regime will be the default option for taxpayers, but they have the option to choose the old tax regime.
- The new tax regime also includes revised income tax slabs, a standard deduction of Rs 50,000 for salaried and pensioners, an increase in the rebate under Section 87A for taxable incomes not exceeding Rs 7 lakh, and a reduction in the highest surcharge rate to 25% from 37%.
- The old tax regime remains unchanged for the financial year 2023-24, with no changes in the income tax slabs, deductions, and exemptions.
- The old tax regime offers different basic income exemption limits based on the taxpayer's age, with a rebate under Section 87A available for taxable incomes not exceeding Rs 5 lakh.
- The new, concessional tax regime was introduced in the financial year 2020-21 and has been revised in the financial year 2023-24.
- It has lower tax rates than the old tax regime, but taxpayers who opt for it must forego approximately 70 commonly claimed tax deductions and exemptions. The new tax regime is the default option from the financial year 2023-24, and taxpayers must choose between the old and new tax regimes each year, if they don't have any business income.
- The primary line is that both people in the highest and lowest tax bands gain from the new income tax slab.
Question:
Q.1 Which of the following is not a change announced in the Budget 2023 for the new tax regime for FY 2023-24?
a. The basic exemption limit increased to Rs 3 lakh
b. Standard deduction of Rs 50,000 introduced for salaried and pensioners
c. Rebate under Section 87A increased for taxable incomes not exceeding Rs 7 lakh
d. No changes to the old tax regime
