February 1, 2023 with the high expectations and demands from the taxpayers, Nirmala Sitharaman, the Union Finance Minister is ready to present her 4th full budget.
This budget is noteworthy since it is the last complete budget of the present government before the 2024 election, which could be a turning point in the outcome of the vote. We should wait and see to determine whether the government has given heed to the expectations and demands voiced.
The revision of income tax slabs is one anticipation for the 2023 budget. Since 2017–18, nothing has changed. According to the analysis, 70% of respondents believe that modifying certain aspects of personal taxation will improve the quality of life of people.
The 5% tax rebate under the new tax system implemented in 2017 helped taxpayers pay less in taxes, however it eliminated some deductions. The taxpayer can select either the old or new tax, which is an interesting fact. The new tax rates, when weighed against their disadvantages, are more conducive for senior citizens.
The tax rate was 5% of the 2,50,000 rupees of income and 30% for income over 15 lakhs. The old taxation system imposed a 30% tax on income beyond 10 lakhs. The taxpayers in the coming budget anticipate that the tax slab would be enlarged, pushing the threshold for the 30% tax rate up from 10 lakhs to 20 lakhs.
The increase in the 80C limit is another forecast on the budget. The Section 80C of Income Tax Act, 1961 allows for deductions from taxable income on a variety of investments up to 1.5 lakh rupees annually. Currently, a taxpayer could deduct up to Rs 1.5 lakhs from their total income, but the public is clamouring for an increase to rupees 2.5 lakhs.
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