10 major income tax rules changes from 1 April 2023
Quick list of Income Tax Updates 2023-24
In this post, We’ll talk about the major 10 changes to income tax rules from 1 April 2023. Let’s look at each of them as follows:
- New income tax regime to be default regime
- The tax rebate limit has raised to to ₹7 lakh
- Standard deduction
- Changes in Income Tax slabs
- Leave Travel Allowance
- These mutual funds do not provide LTCG tax benefits
- Market Linked Debentures
- Life Insurance policies
- Elderly Citizens’ Benefits
- Physical gold conversion to e-gold receipt is exempt from capital gains tax
1) New income tax regime to be default regime
The new income tax system will become the default tax regime on April 1, 2023. Tax assessors will continue to have the option of using the previous regime.Salaried and pensioners: the standard deduction under the new system for taxable income exceeding Rs.15.5 lakhs is Rs.52,500.
In Budget 2020-21, the government introduced an optional income tax regime that would tax individuals and Hindu Undivided Families (HUFs) at lower rates if they did not take advantage of certain exemptions and deductions, such as the house rent allowance (HRA), home loan interest, and investments made under Section 80C, 80D, and 80CCD. According to this, all income up to Rs. 2.5 lakh was free from tax.
2) The tax rebate limit has raised to to ₹7 lakh
The increase in the tax rebate limit from 5 to 7 lakhs means that individuals with incomes under 7 lakhs do not need to make any investments in order to qualify for exemptions; their whole income is tax-free regardless of the amount of investments they make.
