Union Budget 2023: Income tax limit raised from Rs 5 lakh to Rs 7 lakh in new tax regime

At the Union Budget 2023, Finance Minister Nirmala Sitharaman raised the tax rebate limit to Rs 7 lakh under new tax regime. This means people with income up to Rs 7 lakh per annum will effectively pay no income tax. The Finance Minister announced a benefit of Rs 52,000 for individuals with Rs 15 lakh per annum income.

"I introduced in 2020, the new personal income tax regime with 6 income slabs, starting from Rs 2.5 lakh. 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 lakh," she said. 

Personal Income Tax

The new tax rates are: 

0 to 3 lakh: Nil 

Rs 3 lakh to Rs 6 lakh: 5% 

Rs 6 lakh to Rs 9 lakh: 10% 

Rs 9 lakh to Rs 12 lakh: 15%

Rs 12 lakh to Rs 15 lakh: 20% 

Rs 15 lakh and above: 30%

Further, the Union Budget 2023 has reduced the highest surcharge from 37% to 25%. This means the maximum tax rate is now reduced to 39%. 

Nirmala Sitharaman further announced that the New Tax Regime will now be the default tax regime. 

#BREAKING on #BudgetWithArnab | In major relief for common public, FM Sitharaman raises tax rebate limit to Rs 7 lakh under new tax regime. #NirmalaSitharaman #Budget2023 #AmritKaalBudget https://t.co/WqNLGicZYT pic.twitter.com/UoJbxdCggz

— Republic (@republic)