UNION BUDGET 2023-24 AND BENEFITS FOR SALARIES CLASS

Introduction

Whenever the budget presentation is scheduled, lot of speculation takes place in the share market. The Expectation as to increase in prices and decrease in prices of products. But for the salaries section, the expectation would be increase in 80 C limit(saving and investment).As usual this budget has no place for the increase in 80 Limit, but other happy news for the salaries class to get their tax burden reduced.

Standard Deduction

Standard deduction can be availed under section 16 (i) of Income Tax Act 1961. It is to be deducted from gross salary as shown below:

 

Current Standard Deduction

Proposed

Standard Deduction

Salary

Taxable allowances

Taxable perquisites

XXX

XXX

XXX

XXX

XXX

XXX

GROSS SALARY

Less: Deduction u/s 16

i)Standard deduction

ii)Entertainment allowances

ii) Tax on Profession

XXX

 

Rs.50,000

XXX

 

Rs.75,000

NET SALARY

XXXXXX

XXXX

There is a considerable relief for the salaries class for the extension of standard deduction and increase in deduction for family pension.

v  The current standard deduction of Rs. Rs. 50,000 to Rs.75,000

v  Family pension deduction: currently it is Rs.15, 000 and new deduction is Rs.25, 000.

These two revision will be bring some relief and

Slab Rates

New Tax Regime

 

Old Regime

 

Tax Rate as%

 

Income Range

Tax Rate

Upto Rs.3 lakh

NIL

 

Upto 2.5 lakh

NIL

RS.3 to Rs.7 lakh

5%

 

Rs. 2.5 lakh to Rs.5 lakh

5%

Rs.7 lakh to 10 lakh

10%

 

Rs.5 to Rs.10 lakh

20 %

Rs.10 lakh to Rs.12 lakh

15%

 

Above Rs.20 lakh

30%

Rs.12 lakh to 15 Rs. lakh

20%

 

 

 

Above Rs.15 lakh

30%

 

 

 

 Overall takeaways:

1.       Standard Deduction for salaried employees increased from ₹50,000 to ₹75,000

2.       Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000

3.       80 C Deduction of Rs.1,50,000 remain unchanged

4.       Health and Education cess 4% remains the same

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