Key highlights of Budget 2023 affecting salaried employees
When it comes to the everyday expectations of the common man from the government, the annual Union Budget plays a key role. The income tax for a salaried person greatly affects his take-home salary. And that is why when Finance Minister Mrs NIrmala Sitharaman presented the budget on 1st February 2023, the salaried class hoped to see some reforms that eased the tax burden.
In her 5th Union Budget, the FM brought major changes to the ongoing income taxation system. Here are the key highlights of Budget 2023 that would affect salaried employees.
In the Union Budget 2023, there has been a proposal to bring changes in the income tax slabs. Under the New Tax Regime, there would be no income tax on an income up to INR 7 lakhs per financial year. There are no changes in the old regime, where there is no tax on an annual income of up to INR 5 lakhs.
Standard deductions and exemptions are available with the old tax regime. However, the finance minister allowed an INR 50,000 standard deduction in the new regime.
Another proposed change is the decrease in the number of slabs, which is now 5. The tax exemption limit has been increased to INR 3 lakhs. The table given below will help you understand the income tax slabs under the New Tax Regime:
Income tax slabs under the New Tax Regime
Income tax rates under the New Tax Regime FY 2023-24
0 to Rs 3 lakh
INR 3 lakh to INR 6 lakh
5% on the income that is above INR 3 lakh
INR 6 lakh to INR 9 lakh
INR 15,000 + 10% on the income that is above INR 6 lakh
INR 9 lakh to INR 12 lakh
INR 45,000 + 15% on the income that is above INR 9 lakh
INR 12 lakh to INR 15 lakh
INR 90,000 + 20% on the income that is above INR 12 lakh
Income above INR 15 lakh
INR 1,50,000 + 30% on the income that is above INR 15 lakh
To make ITR filing hassle-free for the taxpayer, the finance minister announced the rolling out of the Common IT Return Form.
Under the current environment of global recession, experts believe that the Finance Minister was able to find a balance between maintaining a financial deficit and pursuing the expectation of the public. The FM also spoke about, with the support of the government, how India was to soon emerge as a fast-growing general insurance market. With the focus on agriculture, job creation, increase in the standard deduction, the budget looks like a step in the right direction for most salaried employees.