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The much awaited general budget (Union Budget 2023) was presented yesterday on Wednesday for almost all sections. People especially the salaried middle class had high expectations from this budget. People were expecting relief on the front of exemptions and deductions. However, in this case only disappointment came from the budget. Whatever changes were made by the government regarding income tax, they were made in the new tax system. However, even after this, the government is expecting a good increase in tax collection in 2023-24.
First of all, let us know what changes have been made in the budget regarding income tax? There has been no change in the old tax regime in this budget. This means that there is no tax on income up to Rs 5 lakh in both the new tax regime and the old tax regime. For the new tax regime in the budget, it has been proposed to increase this rebate from Rs 5 lakh to Rs 7 lakh. That is, in the new tax system, those earning up to Rs 7 lakh will not have to pay any tax.
The second change is that in the new tax regime, the income tax exemption limit has been increased to Rs 3 lakh. Along with this, changes have also been made in the tax slab. Under the revised slab, there is no tax on income between 0 to 3 lakhs. 5% tax on income of 3 to 6 lakhs, 10% on income of 6 to 9 lakhs, 15% on income of 9 to 12 lakhs, 20% on income of 12 to 15 lakhs and 30% on annual income above 15 lakhs . Understand it from the below graphics…
Source: ISB
If you look at the old tax system, there is no tax on income up to Rs 2.5 lakh. Income from Rs 2.5 lakh to Rs 5 lakh is taxed at 5 per cent, from Rs 5 lakh to Rs 10 lakh at 20 per cent and above Rs 10 lakh at 30 per cent. In the old system, there are about 70 deductions and exemptions like HRA, 80C.
Even after this change made in the tax system, the government is expecting a good increase in tax collection. Although people were hoping for a change in the old tax system. The trend of increase and decrease in tax collection so far can be understood from this graphic…
Source: ISB
Presenting the budget, Finance Minister Nirmala Sitharaman said that the government has estimated an increase of more than 10 percent in tax collection in 2023-24. According to the budget estimate, the income tax collection in 2023-24 can increase by 10.5 percent and cross Rs 9 lakh crore.
Source: ISB
This includes both personal income tax and corporate income tax. This increase is equivalent to the estimate of GDP growth.
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