Start your tax planning for the FY 2023-24 through budget highlights – Personal Finance
Budget highlights 2023 – Direct Taxes
Budget 2023, announced on 1st February 2023, brings a Bucket of happiness for all of us in the form of a reduction in tax liability with new slab rates.
Yes, in the recent budget, the government has changed the slab rates of Income tax for individuals and HUF who are opting for the new regime. New tax slab rates prescribed are:
Slab rates – New Regime
| Slabs of Income (Rs.) | Rate of tax |
| 0 – 3 Lakhs | 0% |
| 3 Lakhs – 6 Lakhs | 5% |
| 6 Lakhs – 9 Lakhs | 10% |
| 9 Lakhs – 12 Lakhs | 15% |
| 12 Lakhs – 15 Lakhs | 20% |
| > 15 Lakhs | 30% |
Other significant benefits provided to taxpayers are –
- A standard deduction of Rs.50,000/- to salaried individuals is extended in the new regime which was earlier allowed to the person opting old regime only.
- Deduction from family pension up to Rs.15,000/- is extended to assessees opting new regime now.
- The highest rate of surcharge will be reduced from 37% to 25% now for the person opting new tax regime. This will further reduce the overall effective tax rate to 39%.
- The new income tax regime will be the default tax regime, however, persons will be having the option to choose the old tax regime as well.
- Deduction for expenditure incurred on payments made to MSMEs is to be allowed only when payment is actually made, in order to support MSMEs in timely receipt of payments.
- The maximum amount of exemption of leave encashment at the time of retirement to non-government employees now increased to Rs.25 Lakhs.
- New co-operatives that commence manufacturing activities till 31st March 2024 will get the benefit of a lower tax rate of 15%, as presently available to new manufacturing companies.
- The turnover Limit under the presumptive taxation scheme increased for small and medium enterprises under section 44AD. The limit of Gross Receipts in the case of professionals under section 44ADA also increased. But there is a condition that in both cases receipts/turnover in cash should not exceed 5% of Total Gross Receipts/Turnover.
- A limit of Rs.3 Cross for TDS on cash withdrawal is provided to cooperative societies.