“In the Budget speech, our Hon’ble FM said that “My third proposal is for the salaried class and the pensioners including family pensioners, for whom I propose to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs.15.5 lakh or more will thus stand to benefit by Rs.52,500″
Well, as per current income tax provisions, standard deduction of Rs.50,000 was not available for salaried person who opted for new tax regime [i.e. forgo deduction on interest on self occupied housing loan, exemption of HRA, deduction on tax saver investment covered in 80C,80D etc and pay tax at reduced rate (i.e. from 2.5 lacs to 5 lacs of Income – 5%; from 5 lacs to 7.5 lacs – 10% tax, from 7.5 to 10 lacs of income – 15% and so on)].
It is proposed to provide benefits for standard deduction to tax payers opting for a new tax regime. Further, under the new tax regime, no tax till income upto 3,00,000 and tax rate of 5% for income of Rs.3 lakhs to 6 lakhs, 10% for income of 6 lakhs to 9 lakhs, 15% for income Rs.9 lakhs to 12 lakhs, 20% for income Rs.12 lakhs to 15 lakhs and 30% for income above 15 lakhs
Thus, if you are earning a salary income of Rs.15,50,000 and you are opting for a new tax regime; earlier gross tax liability was Rs.2,02,500 which is now reduced to Rs.1,50,000 by giving impact of revised slab rate and standard deduction under new tax regime.”
Thu Aug 31,2023