"New Tax Regime: The Default Option for Indian Taxpayers with Income Under Rs 7 Lakh"
New tax regime is default tax regime
If income is under Rs 7 lakh then no income tax will be charged
If income is more than 7 lakh then pay as per slabs:
0 to 3L - Nil
3 to 6L - 5%
6 to 9L - 10%
9 to 12L - 15%
12 to 15L - 20%
Above 15L - 30%
You can also opt for old tax regime
— Anshul Saxena (@AskAnshul) February 1, 2023
Introduction:
New tax regime is default tax regime
If income is under Rs 7 lakh then no income tax will be charged
If income is more than 7 lakh then pay as per slabs:
0 to 3L - Nil
3 to 6L - 5%
6 to 9L - 10%
9 to 12L - 15%
12 to 15L - 20%
Above 15L - 30%
You can also opt for old tax regime
In the Union Budget 2021, the Indian government introduced a new tax regime that replaces the old tax system. The new tax regime has different tax slabs and exemptions, with the aim of simplifying the tax filing process for taxpayers.
The New Tax Regime:
Under the new tax regime, taxpayers with an annual income of less than Rs 7 lakh are exempt from paying any income tax. For those with an income above Rs 7 lakh, tax is levied as per the following slabs:
0 to 3L: Nil tax
3 to 6L: 5% tax
6 to 9L: 10% tax
9 to 12L: 15% tax
12 to 15L: 20% tax
Above 15L: 30% tax
Opting for the Old Tax Regime:
Taxpayers who feel that the new tax regime does not align with their financial needs have the option to opt for the old tax regime. However, this option is only available if the taxpayer files a declaration in Form No. 10-IE before the due date for filing the tax return.
Under the old tax regime, taxpayers can avail of various exemptions and deductions to reduce their taxable income. Some of the most common deductions include investments in tax-saving instruments, medical expenses, and donations to charitable institutions.
Conclusion:
The new tax regime is a default option for Indian taxpayers with an income of less than Rs 7 lakh. Those with an income above Rs 7 lakh can choose between the new and old tax regimes, depending on their financial needs and preferences. Taxpayers should evaluate their financial situation and seek professional advice before making a decision on which tax regime to opt for.
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