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As per the current income tax provisions, an individual is required to pay taxes based on slab rates. Here's what changes are experts looking at
Union Finance Minister Nirmala Sitharaman will present the full-year Budget 2023 on February 1, 2023. Citizens are awaiting the Budget announcements related to income tax slabs. The tax rate for individuals has not been changed since the FY2017-18. The only change that was introduced in February 2020 was the ‘New Tax Regime’. Now, experts want Budget 2023 to make changes to the slab rates to give more purchasing power to individuals and some relief to the employed taxpayers.
As per the current income tax provisions, an individual is required to pay taxes based on slab rates. The highest slab rate (after including surcharge and cess) for income exceeding Rs 5 crore in India is at present 42.744 percent. Tapati Ghose, Partner an Deloitte India wants the highest tax rate of 30 percent to be reduced to 25 percent and the threshold limit for the highest tax rate be increased from Rs 10 lakh to Rs 20 lakh. Therefore, the proposed highest slab rate (including surcharge and cess) can be reduced to 35.62 percent.
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According to Ghose, the revision of tax slab rates could be as follows:
Currently, 7 income slabs are available under the new tax regime. According to it, annual income up to Rs 2.5 lakh is exempt from tax.