Union Budget 2023 has brought changes in the country's standard deductions applicable to taxpayers. The budget has revamped everything from revised tax slabs to alterations in the kinds as well as the income amount of deductions and exemptions. Certain other changes are also introduced in the deduction in the new tax regime.
The latest tax regime has become the default structure for tax deductions. The earlier standard deductions are now applicable to pensioners and salaried individuals. However, individuals can still opt for the previous tax regime.
Here is Fi Money sharing all the information you need about the deductions under the new tax regime!
A standard deduction implies a flat rebate from taxpayers' gross salary. Taxpayers do not need to apply through a form to claim the deduction. They can directly discount it on their income. However, the beneficiaries have to confirm if said deductions are accurately calculated.
The taxes for pensioners also come under standard deductions under the new regime. These taxpayers are divided into the categories of the following:
As per the Union budget 2023- 2024, the standard deductions applicable to the taxpayers under the old regime will now be available for all under section 115BAC of the Income Tax Act. The benefits have been extended to pensioners, salaried individuals, and family pensioners with deductions under the new tax regime.
The pensioners can claim deductions of ₹50,000 as per section 16 of the IT Act. The family pensioners can receive benefits of standard deductions of ₹15000 or one-third of the total family pension in the latest 2023-2024 regime.
Considering the new deductions, individuals with income up to ₹7.5. lakh do not have to pay any tax. To put it more clearly, the basic exemption limit applies to all with income above ₹3 lakhs except for super senior individuals. Only through the rebates the income up to ₹7.5 lakhs is free from tax liability.
This deduction helps in providing relief to taxpayers from financial burdens. These deductions allow senior citizens to invest in options like NPS to maximise tax savings.
The standard deduction in the new tax regime attempts to include more individuals in the revised tax structure. The rebate, which was once applicable to individuals in the old tax regime, is now provided to all salaried and family pensioners. It's time you plan your investments properly to take advantage of ₹50,000 deductions in the FY 2023-2024.
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The new tax regime provides deductions under various categories. These include the following:
The non-claimable deductions in the new tax regime include the following:
