What the Budget means for you

₹ 5 crore from 37% to 29%. This reduces the maximum marginal tax rate to 39% from 42.74% under the concessional tax system.” title=”Budget 2023 has proposed to reduce surcharge on incomes above ₹ 5 crore from 37% to 29%. This brings the maximum marginal tax rate down to 39% from 42.74% under the concessional tax system.”>

View the Full Image

It has been proposed in Budget 2023 to reduce the surcharge on the above incomes 5 crore from 37% to 29%. This brings the maximum marginal tax rate down to 39% from 42.74% under the concessional tax system.

The concessional tax regime pot has been sweetened in Budget 2023. It proposes to raise the basic exemption limit to 3 lakh, cut the tax slab rates and improve the tax rebate limit to 7 lakh from the stream 5 lakh, which means individuals with income up to 7 lakh will not pay any tax under the concessional system. There is relief for the super rich too: the above income surcharge 5 crore is being reduced from 37% to 29%. This brings the maximum marginal tax rate down to 39% from 42.74%. It aims to attract more taxpayers to the simplified concessions regime as it has received few takers since its introduction. Although the proposed changes will significantly reduce the tax outlay for those who have already opted into the new regime, it may not be beneficial for you to switch from the old regime to the new one. Back-of-the-envelope calculations show that there are taxpayers who make investments on the basis of it 4.2 lakh to avail tax breaks under the old regime is better to stick with it. The table above shows the old tax slabs and the new tax slabs of the concessional tax system.

Graphics: Mint

View the Full Image

Graphics: Mint

The proposed changes will change the tax payout for taxpayers already under the concessional tax system from FY24. Income up to 7 lakh is exempt from paying any tax with the increased tax rebate limit. In fact, with a standard deduction of 50,000 provided to salaried persons and pensioners, taxpayers in these categories with income up to 7.5 lakh will pay zero tax. For income above 7 lakh, there is a 20-30% reduction in tax outlay.

For example, a taxpayer whose income 9 lakh will pay 45,000 in tax besides 60,000 under the current slab rates. Likewise, forward tax disbursement 20 lakh income will decrease by about 15%.

The super-rich with earnings above 5 crore benefit not only from the reduced tax rates but also from lowering of surcharge which will reduce the effective tax rate from 42.7% to 39%. The table above explains the reduction in tax outlay with the new slab rates.

Denial of responsibility! vismuseum.org.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at loginhelponline@gmail.com The content will be deleted within 24 hours.

Read original article here

Leave a Comment