What is Income Tax? Income tax is a type of direct tax the central government charges on the income earned during a financial year by individuals and businesses. It is calculated based on the tax slabs defined by Income Tax Department.
What’s New in Income Tax
Budget 2023 Updates
- A tax rebate of Rs 7 lakhs has been introduced in the New Tax Regime. Therefore, you do not have to pay tax if your taxable income is below 7 lakhs under the new tax regime.
- The new tax slabs under the new tax regime will be:
- up to Rs 3 lakh: Nil
- Rs 3 lakh- Rs 6 lakh: 5%
- Rs 6 lakh-Rs 9 lakh: 10%
- Rs 9 lakh-Rs 12 lakh: 15%
- Rs 12 lakh- Rs 15 lakh: 20%
- Above Rs 15 lakh: 30%
- The standard deduction of Rs 52,500 has been introduced under the new tax regime for salaried classes with more than Rs.15.5 lakh taxable income.
- The highest surcharge under the new tax regime has been reduced to 25% from 37% for people earning more than Rs 5 crore. This move brings down their tax rate from 42.74% to 39%.
- The new IT regime will be the default tax regime. However, taxpayers can choose the old regime.
- Leave encashment for non-government employees has been increased to Rs 25 lakh from Rs 3 lakh.
- TDS rate reduced to 20% from 30% on taxable withdrawal of EPF.
Click here for highlights on Budget 2023
- 02 May 2022 – CBDT notifies form for filing the ‘Updated’ income tax returns
- 27 April 2022 – Form 26A, Form 27BA, Form 10BD & Form 10BE are available on the income tax portal.
- 20 April 2022 – Income Tax Portal announced that UDIN update functionality is enabled for Forms filed from June 2021 onwards.
Budget 2022 Updates
- New provision is introduced to allow taxpayers to update the past return and include omitted income by additional tax payment.
- Income from transfer of digital assets such as crypto to be taxed at 30%.
- The surcharge on the long-term capital gains (LTCG) has been capped at 15%