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Income Tax Regime: Companies have issued Form 16 to their employees. Now salaried taxpayers can file income tax returns. Many taxpayers have filed ITR. To file returns, taxpayers have to choose either the new or old income tax scheme. Each system has its own benefits. According to this, taxpayers can decide which system is beneficial for them.
Major changes in the new tax regime in the 2023 budget
Finance Minister Nirmala Sitharaman made several major changes in the new tax system in the Union Budget 2023. She had increased the basic exemption limit from Rs 50,000 to Rs 3 lakh. Apart from this, the exemption available under section 87A was increased. With this, people with annual income up to Rs 7 lakh do not need to pay tax in the new system. Its purpose was to make tax calculation easier.
It is important to understand tax-saving and its benefits
Tax experts say that which system is beneficial for you, new or old, can be decided on some parameters. For this, the taxpayer has to properly understand his potential income, possible deductions and available exemptions. The new system is especially beneficial for those who do not do tax-saving or investing. At the same time, the old system is good for those who can invest.
The new scheme is beneficial for taxpayers with annual income up to Rs 7 lakh
Experts said that the new system is beneficial for those whose annual income is up to Rs 7 lakh, because their tax liability becomes zero. If your income is up to Rs 7 lakh and you do not take advantage of deductions, then the new tax system can be beneficial for you. If you have made a good investment in tax saving instruments, then the old tax system will be right for you. This will reduce your tax liability. Experts also say that the decision of new and old tax policy will depend on how much your tax saving investment is.