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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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