New Tax Regime 2023: New Income Tax Slabs Announced In Budget 2023

The new tax regime has been announced with the Union Budget 2023 by the Finance Minister, Nirmala Sitharaman. Under the new tax regime, you do not have to pay any tax if your income is below or equal to Rs 7,00,000 thanks to tax rebates. Moreover, the lowest tax slab which was Rs 2,50,000 earlier, has now been shifted to Rs 3,00,000. So if anyone’s income below Rs 3,00,000 is 100% tax free! This is a really great decision considering the fast increasing inflation rate. But this also raises confusion among the people as to which tax regime is better, the old one or the new one? In this article, we will discuss the latest tax regime and tax slabs announced today in the Budget 2023, and we will also see which tax regime is better. 

The Government of India has decided to reduce the weight on the people by reducing the income tax that we pay every year. This was a necessary step as the inflation rate has always stayed ahead of our income and we somehow have to catch up to it to meet our daily expenses. Thus, the new tax regime will be really beneficial for people who have lower incomes and have no ways to claim a tax rebate. The new tax regime has 5 tax slabs, unlike the old tax regime which has 6 slabs, starting from Rs 2,50,000. This is good news for people who have an income lower than Rs 3 lakhs as they do not have to pay any tax on their incomes.

Before moving forward, let’s take a look at the New Tax Slabs 2023-24:

As you might have noticed by now, the new tax regime from the budget 2023 has 5 tax slabs, starting from Rs 3,00,000 and going all the way to Rs 15,00,000 with a slab rate of 30%. This shows that although things didn’t change that much for those who fall under the higher slabs, the majority that stay under the lower slabs will benefit from the new tax regime. Anyone whose income is under Rs 3 lakhs has no need to pay any tax, which is a great relief for many.

With the announcement of the Union Budget 2023, we also got to see some changes in the income tax rebate for all taxpayers. If your income is up to Rs 7,00,000 you can take benefit of the various tax rebate schemes. This means that people with up to Rs 7 lakhs of income may not have to pay any tax whatsoever. But if your income exceeds that mark, then the tax rate will be applied accordingly.

The new tax regime is a smart upgrade to the old regime which may have huge merits for some while others may not like it much. Under the new tax regime, the base deduction from the annual income is lesser than that of the old regime but, the old regime has various options for tax rebates for those who have a higher income. So, if you are having a hard time deciding which tax regime to pick, you can decide on the basis of your income and available tax rebate options. Here is a side-by-side comparison of the new and old tax regimes:

Yup, that is all for the new tax regime presented in the Union Budget 2023 ceremony today. The new tax regime will come into effect on 1 April, which is the beginning of a new fiscal year. All taxpayers will directly pay taxes under the new tax regime by default but if you wish, you can change to the old tax regime if it suits you better. Do let us know if you have any questions regarding this new tax regime and tax slabs set by the Government of India. Also, do you think these tax rates are good enough for everyone? Let’s take the discussion to the comments section below. 

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