New Income Tax Rules effective from 1st April, 2023 for Taxpayers

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New Income Tax Rules effective from 1st April,
2023 for Taxpayers
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• Beginning from 1st April, 2023 the new Financial
  Year 2023-24, will commence. Union Finance
  Minister Nirmala Sitharamans announcements from
  Budget will take effect from April1.
• Some major changes in Income Tax Rules like
  changes in income tax slabs to tax rebate limit
  raised, default tax regime, No LTCG tax benefit
  on debt mutual funds, amongst others. Here are
  the brief income tax changes that will impact
  taxpayers in 2023-24.
• 1. New Income Tax Regime to be the default
  regime Starting 1 April 2023, the new income tax
  regime will act as the default tax regime.
  However, taxpayers will still have the option to
  choose the old regime. If you are a salaried
  taxpayer, TDS will be deducted based on tax
  rates under the new tax regime. Therefore, while
  declaring investments, you must carefully choose
  between the Old regime and the new regime.
• 2. Changes in Income Tax Slabs in New Tax Regime
• Slab Tax Rates
• Upto 3,00,000 Nil
• 3,00,001- 6,00,000 5
• 6,00,001-9,00,000 10
• 9,00,001-12,00,000 15
• 12,00,001-15,00,000 20
• More than 15,00,000 30

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• 3. Rebate u/s 87A under New Tax Regime Rebate u/s
  87A is increased under New Tax Regime. The
  taxpayers having income upto Rs 7 lakhs are not
  required to pay any taxes. The maximum rebate
  under New Tax Regime is Rs 25,000. In short, any
  person whose income under the new tax regime is
  less than or equal to Rs. 7 lakhs, need not
  invest anything to claim any sort of exemption as
  the entire income would be tax-free irrespective
  of the quantum of investment made in such
  cases.4. Standard Deduction The standard
  deduction of Rs 50,000 under the old regime shall
  also be extended to the new regime. Under the new
  regime effective from April 2023, the benefit of
  Rs50,000 standard deduction will be allowed for
  salaried employees and for pensioners opting for
  new tax regime.
• 5. Surcharge The highest surcharge rate of 37
  is reduced to 25 under New Tax Regime. The
  taxpayers with income of more than 5 crore will
  be paying 25 surcharge instead of 37 under New
  Tax Regime.
• 6. Life Insurance Policies W.e.f 1st April 2023,
  if aggregate of premium for life insurance
  policies issued on or after 1st April, 2023 is
  above Rs. 5 Lakhs, proceeds from such policies
  over the annual premium of ?5 lakh would be
  taxable (i.e Upto Rs. 5 lakh shall be exempt)
• 7. Leave Encashment Exemption Leave Encashment
  exemption on retirement of non-government
  salaried employees is increased to Rs 25
  lakhs from Rs 3 lakhs w.e.f 1st Apr
  2023

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• 8. Tax on Debt Mutual Funds
• W.e.f 01st April 2023, investments in debt mutual
  funds will be treated as short term capital gain
  and taxable at slab rates even if they are held
  for more than 3 years subject to the equity
  exposure being less than 35.
• 9. Senior Citizen Saving Scheme Senior citizens
  can now deposit up to Rs 30 lakh under the senior
  citizens savings scheme as compared to the
  earlier deposit limit restricted to Rs 15 lakh.
  Also, the maximum deposit for the monthly income
  scheme has been increased to Rs 9 lakh from Rs
  4.5 lakhs for single accounts. For joint
  accounts, the limit has been raised to Rs 15
  lakhs from Rs 7.5 lakhs.
• 10. Claims under Section 54 and Section 54F will
  be limited Taxpayers who sell their house
  property or any other capital asset and invest
  the sale amount in a new house receive a tax
  incentive under sections 54 and 54F. However,
  from 1st April, the incentives will be restricted
  to Rs 10 crores. Any gains above that will be
  taxed at 20 (with indexation benefit).
• 11. Increase in Threshold for MSMEs and
  Professionals u/s 44AD and 44ADA There has been
  an increase in the threshold under presumptive
  scheme for MSMEs u/s 44AD from Rs 2 crores to Rs
  3 crores and for professionals u/s 44ADA from Rs
  50 lakhs to Rs 75 lakhs. However, cash receipts
  should not be more than 5.
• 12. Conversion of Physical Gold to Electronic
  Gold Receipt to become Tax Free Effective April
  2023, there will be no capital gains tax
  implication if physical gold is converted to
  Electronic Gold Receipt (EGR) or the vice-versa.
• 13. Tax on Online Gaming A new section, 115BBJ,
  was introduced to tax the winnings from online
  games. All forms of winnings, such as cash, kind,
  vouchers, or any other benefit, from online
  gaming, will attract tax at a flat 30, which
  will be deducted at source immediately at the
  time of receiving the winning amount.
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