This time there were changes in the budget 2023 regarding income tax. Income up to Rs 7 lakh has been made tax-free. Let us know how you can avoid paying more tax if your income is more than 7 lakhs.
If you are in confusion after the changes made in the budget this time, then this news is very important for you. This time a lot of changes have been made in the budget regarding income tax. After the addition of the new tax regime, where many new things have been included, many things have been abolished.
The tax exemption limit has been increased in the new tax regime. If your annual income is above 7 lakhs, then whether you should live in the new income tax system or in the old one, this question may be troubling you. In order to increase the attraction of people towards the new tax regime, the government has also made a new arrangement regarding Standard Deduction.
There will be a one-time savings of 50,000 under the benefit of standard deduction. Income up to Rs 7 lakh has been made tax-free, but there are many ifs and buts for income above that.
In which system will have to pay less tax
Where will you benefit more, in the new system or in the old tax slab. In fact, the benefits that were available under the old income tax, will now have to be lost. The exemptions in the old tax regime on home loans, health insurance and children’s school fees will be done away with, but the facility of standard deduction has been added to it. In this way, income up to Rs 7.5 lakh has been made tax free in the new tax regime.
Save more tax by earning more than 12 lakhs
If your income is more than 12 lakhs then which tax regime will be right for you. We are taking this income group because nowadays most of the middle class people have income in this range. Do you know which tax system will be good for you and in which they will save more tax?
If you earn above 12 lakhs, then first check that in the new tax system, according to your tax liability which will be made on the basis of income, according to that, you will have to show a deduction of how much rupees in the old tax system. Retired tax officer Ankit Jain says that if your savings or tax exemption is more than the tax levied according to the new system, then it will be beneficial for you to remain in the old tax system.
If you do not come under income tax exemption, that is, you are not able to show investment, savings or any other deduction, then the new tax system is most suitable for you. If you do not have investments, then the tax you will pay in the new regime is going to be less than the old tax system.
In the new and old tax regime, choose the one which suits you better. If there is any doubt, you can solve your problem with the help of a tax consultant.
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