Personal tax rebate hiked, slabs cut

Finance Minister Nirmala Sitharaman has increased the rebate limit for individual taxpayers from `5 lakh to `7 lakh a year.

“..Currently, those with income up to `5 lakh do not pay any income tax in both old and new tax regimes. I propose to increase the rebate limit to `7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to `7 lakh will not have to pay any tax,” Ms Sitharaman said while presenting Budget 2023 in parliament today. She also announced new tax slabs and scrapped the old twin-structure system that was unboxed in 2020, which taxed citizens under 25 per cent without exemptions and 30 per cent with exemptions allowed.

New Tax Regime to be Default Regime: The new l One stop solution for reconciliation and updation of identity and address of individuals to be established using DigiLocker service and Aadhaar as foundational identity l l Setting up a single window IT system for registration and approval from IFSCA, tax regime will now be the default tax regime, but citizens can still avail of benefits under the old tax regime on an opt-out basis.

Rebate Increased: The finance minister has pro- posed in the Budget to increase the tax rebate. Therefore, the income rebate limit has now been increased to `7 lakh from `5 lakh in the new tax regime.

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