Budget provides major relief to middle class in personal income tax

With the objective of benefitting the middle class, Finance Minister Nirmala Sitharaman today made five major announcements with respect to personal income tax while presenting the Union Budget 2023-24.

These announcements pertaining to rebates, a change in tax structure, an extension of the benefit of the standard deduction to the new tax regime, a reduction of the highest surcharge rate, and an extension of the limit of tax exemption on leave encashment on the retirement of nongovernment salaried employees will provide substantial benefits to the working middle class.

In her first announcement regarding rebate, she proposed to increase the rebate limit to Rs. 7 lakh in the new tax regime, which would mean that the persons in the new tax regime, with income up to Rs. 7 lakh will not have to pay any tax. Currently, those with income up to Rs. 5 lakh do not pay any income tax in both old and new tax regimes.