Will Indians Earning Rs 7 lakh Per year have to Pay tax or not
Let’s clear out the biggest Confusion of Budget 2023-24
FM Nirmala Sitharaman announced that the rebate limit Has been increased from Rs. 5 lakh To Rs 7 lakh under the new tax Regime, which means an annual Income of up to Rs. 7 lakh will be Exempt from taxes.
However, the new tax regime also says that annual income of Rs. 6 – 9 lakh will be taxed at a rate of 10%.
|
0 to 3 lakh Nill |
|
3 lakh – 6 lakh 5% |
|
6 lakh – 9 lakh 10% |
|
9 lakh – 12 lakh 15% |
|
12 lakh – 15 lakh 20% |
|
15 lakh – above 30% |
|
Maximum tax, along With surcharge 39% |
What’s The Confusion? Let’s Figure Our.
Understand with this example:
Suppose Mr. X earns Rs 7 lakh per Annum, then his income would Be taxed as follows:
- First Rs 3 lakh: Nil tax as per
0 – 3 lakh slab
- Next Rs 3 lakh: taxed at 5% as per
0 – 6 lakh slab
- Last Rs 1 lakh: taxed at 10% as per
6 – 9 lakh slab
Therefore, total tax liability will be:
5% of Rs 3 lakh: Rs. 15000
10% of Rs 1 lakh: Rs. 10000
Total tax liability: Rs. 25 lakh
Interestingly, Mr. X will get a complete Refund of this tax since his annual Income is Rs. 7 lakh, which is not Beyond the rebate limit.
What if someone earns Under/over Rs 7 lakh?
Taxpayers who earns under Rs 7 lakh will be able to enjoyThis benefit and get rebate.
However, individuals earning over Rs 7 Lakh, say Rs lakh, 10 lakh, etc., Will not get any refund, as per the new tax regime.
Do you think Union Budget 2023-23 will be Helpful for India’s middle Class, youth & startups?
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