10 income tax rule changes from April 1: Know here
The new financial year 2023-24, which starts on Saturday (April 1), will see the Ministry of Finance bring about many changes to the income tax rules. From changes in income tax slabs to benefits for senior citizens, revised surcharge rates, leave travel, and benefits on mutual funds, among many others, here are all the changes that are going to hugely affect taxpayers from Saturday.
New tax regime and tax rebate limit
According to Union Budget 2023-24, the new income tax regime will act as the default regime if the person does not choose a regime (old or new) while submitting income tax returns. Meanwhile, the tax rebate limit has been increased from Rs. 5 lakh to Rs. 7 lakh. Hence, a person with less than the limit need not invest to claim exemptions.
Change in tax slabs and standard deduction
The new tax slabs are as follows: Annual net income of up to Rs. 3 lakh: Nil Rs. 3-6 lakh: 5% Rs. 6-9 lakh: 10% Rs. 9-12 lakh: 15% Rs. 12-15 lakh: 20% Above Rs. 15 lakh: 30% Moreover, under the new regime, a salaried person with an annual income of Rs. 15.5 lakh or more will benefit from a Rs. 52,500 standard deduction.
LTA and LTCG tax benefits
Moreover, the Leave Travel Allowance (LTA) for non-government employees has been raised from Rs. 3 lakh to Rs. 25 lakh. From Saturday (April 1), no investment in debt mutual funds will be taxed as long-term capital gains (LTCG). They will only be taxed as short-term capital gains.
MLDs and life insurance policies
Meanwhile, investment in market-linked debentures (MLD) will be short-term capital assets after the start of this financial year. Experts say that the impact of this move would be slightly negative, per Hindustan Times. From Saturday, proceeds from life insurance premiums over the yearly premium of Rs. 5 lakh would be taxable. The rule, however, won't be applicable to unit linked insurance plans (ULIP).
Benefits for senior citizens and e-gold conversion
The maximum deposit limit of the savings scheme for senior citizens would be doubled from Rs. 15L to Rs. 30L. For single and joint accounts under the monthly income scheme, the maximum deposit limit would increase to Rs. 9L and Rs. 15L, respectively. Furthermore, if physical gold is converted to an Electronic Gold Receipt (EGR), or vice-versa, there will be no capital tax gain.
