Twenty-five years later, in Budget FY2023-24 announced by incumbent finance minister Nirmala Sitharaman, the highest tax slab remains at 30 per cent, but applies to income above ₹10 lakh under the old tax regime and ₹15 lakh under the new tax regime.
At the same time, there is no tax for income up to ₹7 lakh under the new tax regime, taking standard deduction into consideration. The new tax regime has lower tax slabs compared to the old tax regime, but it doesn't allow investors to claim most of the deductions available, including those under Section 80C of the Income-tax Act, 1961, and others.
Indian investors have wholeheartedly embraced Section 80C in the last 15 years, so much so that a lot of families' savings and investments are made keeping those benefits in mind. It was reintroduced in 2006 (it was first introduced in 1967, but was replaced with Section 88 in 1991) with a maximum investment limit of ₹1 lakh, which was later increased to ₹1.5 lakh in 2010. Since then, despite widespread demands, the limit has not been increased, even as inflation has drained the incomes of households.
In the first two years after the new tax regime was introduced, there were few takers for it as it did not offer the flexibility to save tax for most income groups. However, in the current financial year, it has become more competitive for several income groups and can also benefit the younger generation as well as the senior citizens (read Outlook Money's analysis and guide here: bit.ly/3P91gCd and bit.ly/3E7Crll).
Bu hikaye Outlook Money dergisinin September 2023 sayısından alınmıştır.
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Bu hikaye Outlook Money dergisinin September 2023 sayısından alınmıştır.
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