Friday, February 3, 2023

Union Budget 2023: 1 crore people earning between Rs 5-7 lakh will benefit from the new tax regime

Union Budget 2023: 1 crore in Rs 5-7 lakh income range set to gain from new tax regime


Delhi, India: According to data provided by the finance ministry, the government's decision to raise the rebate level to Rs 7 lakh under the new tax regime will benefit close to one crore individuals with incomes between Rs 5-7 lakh.

According to government sources, a number of these individuals are unable to use the benefits that are available for investing in specific savings instruments like the public provident fund or 5-year fixed deposits, which increases their tax liability.

“These individuals will not be required to pay any tax, regardless of the amount of savings-related deductions they may be eligible for. A representative of the finance ministry stated, "We also need to factor in that savings increase as the income level goes up, as you have higher disposable income."

Finance Minister Nirmala Sitharaman sweetened the new individual tax regime in her fifth budget, which she presented on Wednesday because it had not gained the desired traction. Under the new system, the exemption limit will go up from Rs 2.5 lakh to Rs 3 lakh, which will encourage taxpayers to switch.

The government has argued that at all income levels, total tax revenue will be lower.

India has over six million taxpayers, and those with incomes above Rs. 3 lakh will now be required to file returns, even if they do not owe any taxes. Nearly 6.4 million individual returns had been filed as of the end of March 2022, with over Rs 84,000 crore in revenue lost due to deductions for investments and investments under section 80C of the Income Tax Act.

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