New Tax Regime 2023-24

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1

Hi All

My question is regarding the new tax regime

What does the government mean by increasing the tax rebate to 7 lacs ? Does it mean
an employee who earns a salary of Rs 7 lacs need not pay tax ?

Also is the standard deduction of Rs 50k applicable in the new tax regime

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3

Hi All

Any deatils on this please

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4

Hi Kavitha,
I do not know “what the government mean” (!) but I suspect every govt move more specifically regarding taxation, especially, complicating the subject further than simplifying it!!!
But I will try to clarify your doubts with a slightly lengthy answer.
Under the New Tax Regime (NTR), if your TOTAL INCOME is equal to or below Rs7 lakhs, you pay no tax.
TOTAL INCOME means the taxable income of a taxpayer (asessee) by taking into account all heads of income (subject to some types of income which are taxed at special rates, for which some adjustments will be needed) minus all eligible deductions/exemptions etc.
Under the NTR, as you know the tax slabs start from Rs 3lakh onwards. 5% (3L-6L) 10% (6L-9L) 15% (9L-12L) 20% (12L-15L) and 30% (>15L). Under the Tax Rebate provision, if your income is Rs7 L, then the applicable tax on this at those slabs (amounting to Rs25,000) will be rebated to make your tax liability NIL.
If an asessee has salary income, only Std Deduction of Rs50k is available under NTR, so if you have taxable salary of Rs7.50 lakhs (approx Rs62,500 p.m.), you will go into zero tax level (Rs7.50L minus Std Ded Rs0.50L = Rs7 L).
Please do not use the CTC as your taxable income, because employers include all sorts of things in it that are not taxable in your hands (like the employer’s contribution to PF/Pension or telephone/broadband exp reimbursement etc).

Personally I think: If you have HRA to claim because you are staying in a rented premises, and other deductions like int on housing loan, education loan, or LIC/Med insurance, PF/PPF etc, the Old Tax Regime is beneficial.
For more details, pls contact me at abp235[at] gmail.
Regards
CA Agnel Pereira

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5

Thank you so much for such a detailed answer. It’s very well understood now.

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6

Hi Team,
I have some doubts about the new regime.

  1. I have employees with a typical salary above 1500,000
  2. For these employees, x amounts were shown as monthly tax deductions.
  3. As a salary processor, I opened the POI submission window and the employee opted New/Old regime.
  4. All emp who selected the old regime got tax concessions and monthly deductions were reduced.
  5. For Emp who selected New Regime - NO change in IT deductions - WHY???
    Kindly clarify this.
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