Taxpayers, listen up! Key details with regard to the new income tax will not be changed this year. But, as the recent news broke out, the tax system announced on April 1, 2023, is here to stay, and it’s up to you to take up the old or the new tax system at your convenience. The main idea behind the new tax setup was to make figuring out your taxes easier and maybe even lower what you owe.
This comes at a lower tax rate but without some of the breaks and deductions that you could receive under the old plan. Starting this financial year, it’s the go-to choice if seeking to afford you more control and flexibility in your tax payments. Here’s the breakdown under the new plan: if you earn up to Rs 3 lakh, you don’t owe any tax. Start earning just a bit more, and the tax rate slowly inches up: 5% for incomes between Rs 3-6 lakh, 10% up to Rs 9 lakh, 15% up to Rs 12 lakh, 20% up to Rs 15 lakh, and a whopping 30% for anything above that.
This update from the Finance Ministry was needed to clear the air, thanks to the buzz about possible changes coming April 1, 2024. It’s key for everyone to get the right info, so they know the choices they have.
That will give you the opportunity to decide which form of taxing works better for you each year, depending on what will favor your wallet. We all try to wrap our heads around these tax rules. Staying updated with advice from tax pros is just good when things start getting unclear. The new simple rates, or claiming deductions under the old system, with both the options given to you, now it’s your choice, depending on what suits your financial standing and planning. This is given by the government so that it will be able to fit everyone who has a different need, while at the same time being able to make this whole process of filing taxes simple.
