With Budget 2023 changing the income tax slabs in India, several people have been left with pertinent questions. For instance, will the old tax regime be discontinued? More importantly, what’s the difference between the new and previous rates?
This article answers both of those questions. Read on to learn more.
The old regime was the tax rate that existed before the new slabs were implemented. As such, there are approximately 70 deductions and exemptions under this system. Some of these have been unavailable in the recent slabs. More information regarding this is listed below.
Apart from that, the primary distinction between the two variants is the higher tax rebate. Previously, individuals could claim a tax rebate if their income was 5,00,000 INR. This threshold has been increased to 7,00,000 INR under the new regime.
That aside, listed below is a simplified comparison of the old and new tax slabs:
Aside from the difference in tax rates, there are a few other variations between the old and the new regime. For instance, the new tax slabs do not have the following:
As per the latest statement from the Union Finance Minister, Nirmala Sitharaman, there are no plans to discontinue the old tax regime. The new slabs are only meant to offer lower rates, with salaried taxpayers having the option to switch between the two by filing Form 10IE.
For some time now, questions such as "Will the old tax regime be discontinued” have invariably raised some concerns. The good news is that the Centre has no plans to implement such a step.
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By default, everyone is on the new tax slab. However, salaried employees can switch between the old and the new regime whenever they choose. To do this, individuals must inform their employers about the tax slab they wish to opt for in the given year. For others, this option is available only once in their lifetime.
Potential changes to the income tax slabs are put forward during the annual budget proposal. As such, this implementation of the same can occur in February or can take place in the following year.