5 Major Announcements For Middle-Class: Budget 2023-24

On February 1, the Union Budget for 2023-24 was presented in the Lok Sabha by Finance Minister Nirmala Sitharaman.Here are 5 major announcements for the middle class:1. Income Tax Rebate Limit To Be Raised To Rs. 7 Lakhs In The New Tax Regime From 5 LakhsThe individuals with income up to Rs.5 lakh do not pay any income tax in both old and new tax regimes. The Finance Minister proposed to increase the rebate limit to Rs. 7 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh will not have to pay any tax.2. New Tax Slabs introduced The Finance Minister Nirmala Sitharaman has announced Tax for income of Rs 0-3 lakh is nil; income above Rs 3 lakh and up to Rs 5 lakh to be taxed at 5%; income of above Rs 6 lakh and up to Rs 9 lakh to be taxed at 10%; income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20%; and income above Rs 15 lakh to be taxed at Rs 30%.3. Proposal for the salaried class and the pensionersIn respect of the salaried class and the pensioners including family pensioners, the Finance Minister extended the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs. 15.5 lakh or more will thus stand to benefit by Rs.52,500.4. Reduction In highest surcharge rate from 37 per cent to 25 per cent in the new tax regimeThe fourth announcement in personal income tax was regarding the highest tax rate which is 42.74 per cent. This is among the highest in the world. The finance minister proposed to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new tax regime. This would result in reduction of the maximum tax rate to 39 per cent.5. Leave EncashmentThe limit of Rs. 3 lakh for tax exemption on leave encashment on retirement of non-government salaried employees was last fixed in the year 2002, when the highest basic pay in the government was Rs.30,000 per month. In line with the increase in government salaries, the finance minister proposed to increase the limit to Rs. 25 lakh.For reading more on tax cases, please visit LiveLaw's exclusive tax section.

5 Major Announcements For Middle-Class: Budget 2023-24

Mariya Paliwala

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