Union Budget 2023: Increased Standard Deduction and New Tax Regime Slabs Announced

Union Finance Minister Nirmala Sitharaman made history on Tuesday by presenting her seventh consecutive budget. This year’s budget saw significant changes, particularly in the tax regime, with two key announcements for those opting for the new tax regime.

The standard deduction for salaried employees under the new tax regime has been increased from Rs 50,000 to Rs 75,000, providing more tax relief to individuals. This change aims to reduce the tax burden for salaried individuals and encourage greater compliance with the new tax regime.

Furthermore, the budget introduced new tax slabs, simplifying the tax structure under the new regime. Here’s a breakdown of the new slabs:

*

0-3 lakhs:

Nil
*

3-7 lakhs:

5 percent
*

7-10 lakhs:

10 percent
*

10-12 lakhs:

15 percent
*

12-15 lakhs:

20 percent
*

Above 15 lakhs:

30 percent

These new tax slabs are designed to make the tax system more equitable and transparent while encouraging higher incomes. The changes in the new tax regime are expected to have a significant impact on individual taxpayers, providing them with more tax benefits and simplifying their tax obligations.