Budget 2023: Income Tax slabs tweaked, no tax on Rs 7 lakh income under new tax regime

New Delhi: In the final full-fledged Budget of Modi government 2.0, Finance Minister Nirmala Sithraman announced a change in the tax slabs for the income tax payers. Making a slew of announcements in the direct tax category, the Finance Minister announced a much-needed relief for the middle class and something that was also being anticipated by financial experts.

Finance Minister said, “In 2020, the new personal income tax regime with 6 income slabs, were introduced starting from Rs 2.5 Lakhs. Now, I propose to change the tax structure in this regime by reducing the number of slabs to 5 and increasing the tax exemption limit to Rs 3 Lakhs.”

The exemption limit in the direct income tax has been raised from Rs 2.5 lakh to Rs 3 lakh while under the new Tax regime, the income tax rebate has been increased from Rs 5 lakh to Rs 7 lakh.

“Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime,” said FM Sitharaman.

Revised tax slab:  (under new Tax regime)

Personal Income Tax – New rates are as below

Rs 0 to Rs 3 lakhs – Nil

Rs 3 to 6 lakhs – 5%

Rs 6 to 9 Lakhs – 10%

Rs 9 to 12 Lakhs – 15%

Rs 12 to 15 Lakhs – 20%

Above 15 Lakhs – 30%