The new tax regime 2023-24 was launched to simplify the taxes in India and reduce the burden of different compliances from the head of taxpayers. The major differences between the new and old tax regimes are income tax slab rates and the ability to claim exemptions and deductions.
In the budget 2023, significant changes are introduced to streamline the taxation process and promote economic growth that ensures effective tax governance in the country. Below are all the changes made in the income tax to file by individuals in the financial year 2023.
The income tax of India is a way for the government to collect revenue from businesses and individuals. These funds are used for public services such as creating bridges, roads, hospitals, etc. Other than these, it is used to provide services to citizens and pay government obligations.
Every year taxpayers have to file their income tax return as per their tax liability. The taxpayer has different benefits from filing taxes in India as it provides certain exemptions.
Taxes mainly have two types; direct taxes and indirect taxes. The tax earned directly from income is called direct tax and tax calculation depends on the income slab as per the financial year. Direct tax has two types - Income tax and Corporate tax.
Below are the new tax regimes under the new tax slabs:
Income Tax Slabs for Individual Below 60 Years and HUF
Income Tax Slabs for Individual Between 60 Years and 80 Years
Income Tax Slabs for Individual Above 80 Years
As per the tax rates, the following surcharge is applicable across all the categories mentioned above
The 25% or 37% surcharge, which depends on the circumstance, is not applied to the taxable income under sections 111A, 112A, and 115AD. The maximum rate of additional tax that can be charged on such incomes is 15%.
The maximum rate of additional tax that can be charged on capital gains or dividend income covered by Section 112 is 15%. The maximum surcharge for an Association of Persons (AOP) that treats each member as a separate legal entity is 15%.
Note: There is applicable marginal surcharge relief available.
There are different types of taxpayers who fall into different tax slabs. The individuals are divided into two categories, residents and non-residents. The taxpayers are categorized below:
The highlights of the 2023 Union Budget for taxpayers are as follows:
It must be understood that all the income is not taxable under the slabs. The taxable income from Capital gains is an exception to the rule. The capital gains and taxability of income depend on the assets you own and for how long you hold them. The holding period can be short-term or long-term. The holding period will decide the nature of the asset and it can differ from the other assets.
The changes in new tax regimes are many such as higher tax rebate limits, and streamlined tax slabs. Individuals with lower earnings and investments will result in fewer deductions and exemptions with new income tax laws.
At Registrationwala, we help individuals to file an ITR and assist them with ways to save tax by applying for required deductions and exemptions. Reach out to us to know the best possible ways to save tax from the start of the financial year.
Frequently Asked Questions
Q. Do I need to file ITR if my income is below the taxable limit?
A. Yes, you can file an ITR which is called a nil income tax return. It will provide you with income proof for the Visa application, to apply for loans, or for any other type of credit. Also, if the TDS is deducted from your income despite your income being below the tax limit, you need to file an ITR to claim a refund.
Q. What documents are required to file ITR?
A. No document is required to file an income tax return. However, one should retain the documents to produce any competent authority as and when required in the future.
Q. Is it necessary to show income from other sources in ITR?
A. Yes, the taxable income from all sources must be disclosed while filing an ITR. Even the exempt income must be shown, similarly, it can be shown under the Schedule EI.
Q. Should I e-verify to get the IT refund?
A. Electronic verification is important to complete the process of ITR filing. One should e-verify the ITR within the stipulated time. Non-verified ITR will be treated as invalid. There are multiple ways to e-verify ITR such as Aadhaar OTP, Bank ATM, Electronic Verification Code, and net banking.