Under Finance Bill 2023, tax exemption has also been given on income of more than Rs 7 lakh. Under this, individuals earning income slightly above the tax free income of Rs 7 lakh will have to pay tax only on the additional income.
New Delhi. After announcing major changes in the income tax slab in Budget 2023, now the Modi government has given another big relief to the taxpayers. In the first budget, Finance Minister Nirmala Sitharaman changed the new tax regime and kept income up to Rs 7 lakh out of tax.
Now under the Finance Bill 2023, tax exemption has also been given on income of more than Rs 7 lakh. For this, amendments have been made in the Finance Bill. Under this, individuals earning income slightly above the tax free income of Rs 7 lakh will have to pay tax only on the additional income.
The Finance Bill 2023 has been approved by the Parliament and it will become effective from 1 April. In this, some relief has been given to taxpayers under the new tax regime through amendment.
Finance Ministry explained the rules
Clarifying the provision of the Finance Bill 2023, the Finance Ministry has said that under the new tax regime, if a taxpayer’s annual income is Rs 7 lakh, then there is no tax liability on him. But if the income becomes Rs 7,00,100, then the tax liability becomes Rs 25,010. That is, due to additional income of only Rs 100, taxpayers have to pay tax of Rs 25,010. In view of this problem of taxpayers, it has been proposed to give minor relief through amendment in Finance Bill 2023.
Taxpayers will get the benefit of small margin
Let us understand this relief given by the government to the taxpayers through an example. Suppose your income is Rs 7,00,100 means Rs 7 lakh 100 means your income is Rs 100 more than tax free income. Now you have to pay tax of Rs 25,010 because of the excess of just Rs 100.
The government has given relief to such taxpayers. Under the new proposal, if your income is Rs 7,00,100, then they will not have to pay tax of Rs 25,010. Rather, they will have to pay tax only on Rs 100. Tax experts have told according to the calculation that individual taxpayers whose income is up to Rs 7,27,777 can get the benefit of this provision.
Income up to 7 lakhs was tax free in the budget
In Budget 2023, Finance Minister Nirmala Sitharaman had announced that now those earning up to Rs 7 lakh will not have to pay any tax. Earlier, after adopting the tax exemption options, no tax had to be paid up to 5 lakhs. But the new tax regime will give an additional benefit of Rs 2 lakh.
