NEW DELHI: With the new financial year 2023–24 having begun on April 1, several tax rule changes have come into effect.
Let's have a look at some changes here: The new income tax regime has become the default regime from April 1 onward.
However, taxpayers have the option of choosing between the old and new tax regimes. The new tax regime's standard deduction for taxable income exceeding Rs 15.5 lakh is Rs 52,500.
The tax-rebate limit has been raised to Rs 7 lakh. Raising the tax rebate limit to Rs 7 lakh from Rs 5 lakh means that the person whose income is less than Rs 7 lakh needs not invest anything to claim exemptions, and the entire income would be tax-free irrespective of the quantum of investment made by such an individual.
However, there's no change in the standard deduction of Rs 50,000 provided to employees under the old tax regime.
Changes effected in the new tax regime are: Rs 0—3 lakh—nil. Rs 3–6 lakh, or 5 percent. Rs 6-9 lakh - 10 per cent. Rs 9–12 lakh, or 15 percent Rs 12–15 lakh, or 20 percent More than Rs 15 lakh—30 percent
The leave encashment for non-government employees has been exempted up to a certain limit. This limit was Rs 3 lakh since 2002, which has now been raised to Rs 25 lakh.
Since April 1, investments in debt mutual funds have become taxable. They will be taxed as short-term capital gains now.
This would mean that investors wouldn't be able to avail themselves of long-term tax benefits from these types of investments.
Even investments in market linked debt (MLDs) from April 1 onward have become short-term capital assets.
Proceeds from life insurance premiums over the annual premium of Rs 5 lakh have become taxable from April 1 on.
The maximum deposit limit for senior citizen savings schemes has been increased to Rs 30 lakh from Rs 15 lakh from 2023–24 onwards.
The maximum deposit limit for monthly income schemes has also been increased to Rs 9 lakh from Rs 4.5 lakh for single accounts and Rs 15 lakh from Rs 7.5 lakh for joint accounts. (IANS)
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