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Business News/ Money / Personal Finance/  Budget 2023: A look at old vs new current income tax slabs
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Budget 2023: A look at old vs new current income tax slabs

Budget 2023: The basic personal tax exemption limit was last revised in 2014

Income up to ₹2.5 is exempt from taxation under both regimes.Premium
Income up to 2.5 is exempt from taxation under both regimes.

Old vs new current income tax slabs: When it comes to Budget, the only thing that the salaried class look forward to is the income tax rebate. Finance Minister Nirmala Sitharaman while presenting Budget 2023 on 1 February 2023, tweaked the slabs to provide some relief to the middle class. "It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to 7 lakh," Sitharaman said.

She further said under the new personal income tax regime, the number of slabs would be reduced to five.

"I propose to change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to 3 lakh," Sitharaman said.

Currently, a 5 per cent tax is levied on total income between 2.5 lakh and 5 lakh, 10 per cent on 5 lakh to 7.5 lakh, 15 per cent on 7.5 lakh to 10 lakh, 20 per cent on 10 lakh to 12.5 lakh, 25 per cent on 12.5 lakh to 15 lakh, and 30 per cent on above 15 lakh.

Budget 2023: Catch all the Live updates here

Budget 2023: Old income tax slab vs new income tax slab

New tax slabs

1) No tax would be levied for income up to 3 lakh

2) Income between 3-6 lakh would be taxed at 5 per cent

3) Income between 6-9 lakh would be taxed at 10 per cent

4) Income between 9-12 lakh at 15 per cent

5) Income between 12-15 lakh at 20 per cent

6) Income of 15 lakh and above will be taxed at 30 per cent.

Tax SlabsOld Tax RegimeNew Tax Regime
0-3 lakhNILNIL
3-6 lakh5%

NIL

(Income limit for rebate of income tax increased from 5 lakh to 7 Lakh)

6-9 lakh10%10%
9-12c lakh15%15%
12-15 lakh20%20%
Above 15 lakh30%30%

Old tax slabs

1) Income up to 2.5 is exempt from taxation under old tax regime.

2) Income between 2.5 to 5 lakh is taxed at the rate of 5 per cent under the old tax regime.

3) Personal income from 5 lakh to 7.5 lakh is taxed at a rate of 15 per cent under the old regime

4) Income between 7.5 lakh to 10 lakh is taxed at a rate of 20 per cent in the old regime

5) Under the old regime personal income above 10 lakh is taxed at a rate of 30 per cent.

The income tax slabs have not been changed since 2014. The basic personal tax exemption limit was last revised in 2014. FM Sitharaman introduced a new income tax regime while presenting budget 2020. However, the new tax regime remains optional for taxpayers.

 

Tax SlabsOld Tax RegimeNew Tax Regime after 2020
Less than 2,5 lakhNo tax leviedNo tax levied
2.5 lakh to 5 lakh5% tax levied5% tax levied
5 lakh to 7.5 lakh15% tax levied10% tax levied
7.5 lakh to 10 lakh20% tax levied15% tax levied
10 lakh to 12.5 lakh30% tax levied20% tax levied
12.5 lakh to 15 lakh25% tax levied
More than 15 lakh30% tax levied

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 31 Jan 2023, 10:25 AM IST
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