Tax Relief for Taxpayers
New Tax Regime: The Finance Bill for the financial year 2023-24 has been approved by the Lok Sabha. But speaking on the bill before that, Finance Minister Nirmala Sitharaman has given a big relief to the taxpayers. No change has been made in the tax slab, but those whose annual income is a little more than Rs 7 lakh have been given relief.
Let us tell you in detail how taxpayers are going to get tax relief. Under the new tax regime, taxpayers will not have to pay any tax on annual income up to Rs 7 lakh. But those whose annual income is a little more than Rs. 7 lakh, they do not get the benefit of tax rebate of Rs. 25,000 on income up to Rs. 7 lakh. For example, suppose a taxpayer with an income of Rs 7 lakh will save Rs 25,000 in tax. But someone’s annual income is Rs 7,00,100 (Rs 7 lakh 100), he would have to pay tax of Rs 25,010 if he has only Rs 100 more income.
The Finance Minister has announced minor relief to such taxpayers during the passage of the Finance Bill. According to the new proposal, if a taxpayer’s annual income is Rs 7,00,100, he will have to pay only Rs 100 tax instead of Rs 25,010 tax.
Even though the government has increased the scope of tax exemption, but if the annual income of a taxpayer is Rs 7,01,000, then the benefit of a tax rebate of Rs 25,000 will not be available and such taxpayers will have to pay tax of Rs 25,100 and Rs 26,140 including cess.
That is, taxpayers will have to pay tax of Rs 26,140 if there is an additional income of only Rs 1,000 above Rs 7 lakh. If a person’s annual income is Rs 7,29,000, then he will have to pay tax of Rs 29,016. That is, income that is more than Rs 7 lakh will go towards paying tax. These taxpayers have only one option for Tax Relief, that they refuse to take whatever income is more than Rs 7 lakh, only then they will get the benefit of not paying any tax on income up to Rs 7 lakh under the new tax regime.
Tax experts had asked the government to remove this discrepancy by giving some tax relief to the taxpayers. On which the Finance Minister has given minor relief.