10 Income Tax Rules Have Changed: Check Details

03 Apr 2023 0 Admin Tax4wealth 712

10 Income Tax Rules Have Changed For Taxpayers From 1 April 2023: Check Details

Even though the new fiscal year 2023-24 began on April 1, the Income Tax Changes Proposed by Finance Minister Nirmala Sitharaman in Budget 2023 were effective on the same day.

The new income tax rules are:-

1) The New Income Tax Regime Is Now the Default Regime:

On April 1, 2023, the new income tax system became the default tax regime. Tax assessors will still be able to use the former regime. For salaried persons and retirees, the standard deduction under the new system for taxable income above Rs 15.5 lakh is Rs 52,500.

2) Standard Deductibility:

The standard deduction of Rs 50,000, which was available to employees under the previous tax regime, has not altered. According to the finance minister, the standard deduction would be extended to the new pension tax scheme.

3) The Tax Rebate limit has been increased to Rs 7 lakh:

Those with earnings under Rs 7 lakh do not need to make any investments to qualify for exemptions, according to a hike in the tax rebate threshold from Rs 5 to Rs 7 lakh. The income of such people is fully tax-free, regardless of how many investments they make.

4) LTA:

Up to a specific amount, non-government employees are free from the leave encashment obligation. The maximum has been raised to Rs 25 lakh.

5) These Mutual Funds do not provide LTCG Tax benefits:

From today, investments in debt mutual funds will be subject to short-term capital gains tax. Investors would lose the long-term financial benefits that had made such investments appealing in the first place.

6) Marketable Debentures:

Investments in Market Linked Debentures (MLDs) will henceforth be deemed short-term financial assets as of today. With this, grandfathering of prior investments has ended, which has had a modest negative impact on the mutual fund industry.

7) Policies of Life Insurance:

The earnings from life insurance premiums in excess of Rs 5 lakh will be taxable beginning with the commencement of the new fiscal year, or 1 April 2023. Finance Minister Nirmala Sitharaman indicated during the presentation of the Budget 2023 that the ULIP will be exempt from the new income tax regulations.

8) Benefits to Senior Citizens:

The maximum deposit limit under the Senior Citizen Savings Plan will be increased from Rs 15 lakh to Rs 30 lakh. The maximum deposit limit for the monthly income programme would increase from 4.5 lakh to 9 lakh for single accounts and from 7.5 lakh to 15 lakh for joint accounts.

9) Conversion of physical gold to e-gold receipt is exempt from capital gains tax:

According to Finance Minister Nirmala Sitharaman, there would be no capital gains tax if actual gold is converted to an Electronic Gold Receipt (EGR) or vice versa. This will go into effect on April 1, 2023.