Standard Deduction: Nirmala’s announcement of increase in standard deduction, how much benefit will the employees get? –

Standard Deduction: Union Finance Minister Nirmala Sitharaman while presenting the budget in Parliament on Wednesday, February 1 said that the annual standard deduction will be increased. The annual standard deduction is said to be Rs 50,000 to Rs 52,000. This announcement is made for salaried class as well as pensioners and family pensioners. For whom Union Finance Minister Nirmala Sitharaman has extended the benefit of standard deduction in the new tax regime. As a result, any salaried person earning Rs 15.5 lakh or more will get a benefit of Rs 52,500 per annum.

Commenting on the announcement, Fintoo’s Chief Revenue Officer Nikhil Sharma said that currently, the government is allowing standard deduction of Rs 50,000 only to salaried employees and pensioners. Those who are in the old tax system. In the 2023 budget, the new tax system has said to provide this benefit and in that case it is going to provide more benefits than before in the new tax system. As a result, salaried employees and pensioners with income above Rs 7,50,000 will not have to pay any tax due to rebate u/s 87A and standard deduction u/s 16.

Abhishek Dev, Chief Executive Officer and Co-Founder of Epsilon Money Mart said that the tax structure has been simplified with tax exemptions and reductions in tax rates very balanced. This will help increase both savings and consumption. Which is very good for the country’s economy.

Clear’s founder and chief executive officer Archit Gupta said pensioners opting for the new tax regime will get the benefit of standard deduction in addition to lower tax rates. Exemption limit on cash paid at the time of retirement has been increased from Tk 3 lakh to Tk 25 lakh. On the other hand, Dr Suresh Surana, founder of RSM India said that overall Budget 2023 will take a positive role and aims to benefit middle and lower income classes and taxpayers.

Changes in income tax made in the budget

Under the new tax system, if your income is between 0 to 3 lakhs then you will not have to pay income tax. On the other hand, income above Rs 3 lakh and up to Rs 5 lakh will have to pay 5 percent tax under the new system. Under the new rules, 10 percent tax will be payable on income above Rs 6 lakh and up to Rs 9 lakh. On the other hand, income above Rs 12 lakh and up to Rs 15 lakh will be taxed at 20 per cent under the new system. 30 percent tax on income above Rs 15 lakh.

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