02 Feb, 2023 1:42p.m.

An additional ₹ 1 can can cost you ₹25,000 in IT under the new tax regime


Finance Minister Nirmala Sitharaman has tried to make new tax regime more attractive by simplifying the new income tax slab and extending Section 87A benefit to it as well. But, the benefit is not uniform as it is available for only those earning individuals who have an annual income of up to ₹7 lakh. If a taxpayer earns more than ₹7 lakh, then he or she will have to pay income tax on all its income beyond ₹3 lakh per annum.

₹7,00,005 annual income would be considered ₹ 7 lakh annual income. So 

For income of ₹ 7,00,005/- the income tax is NIL

For income of ₹ 7,00,008/- the income tax is calculated as 

  5% for ₹ 3,00,000/- to ₹ 6,00,000/- = ₹ 15000/-

10% for ₹ 6,00,001/- to ₹ 7,00,006/- = ₹ 10000/-

This makes the income tax payable for an income of ₹ 7,00,006/- at ₹ 25000/- 

Finance Minister Nirmala Sitharaman has extended Section 87A benefit of ₹25,000 (raised from ₹12,500) announced in this budget to new tax regime as well. This makes zero income tax on income up to ₹7 lakh in new income tax regime. However, if someone has an annual income above ₹7 lakh, then in that case this Section 87A benefit won't be applicable for such taxpayer while filing its income tax return (ITR).  

So, in the case of one's annual income going above ₹7 lakh by even just Re 1, one will have to pay income tax from ₹3,00,001 onwards.

Whatsapp Share Button

⌂ Go to Home Page

Latest in Important News
Latest in Other News Sections

StaffCorner brings you the latest authentic Central Government Employees News.
About us | Privacy Policy | Terms and Conditions | Archives