The 10 significant modifications to the income tax rules will take effect on April

The 10 significant modifications to the income tax rules will take effect on April

1. DetailsThe announcements made by Union Finance Minister Nirmala Sitharaman in the yearly Union budget on February 1 will take effect as of the start of the next financial year (FY) 2023–24 on April 1. Nonetheless, the revisions to the income tax laws would have the biggest impact on taxpayers.

Hence, the following are the 10 main income tax regulation adjustments that will take effect on April 1:

Default tax regime: According to the finance minister, the new tax regime will take effect if a taxpayer fails to specify which of the two tax regimes—old or new—they intend to file their return under.
Raised tax rebate threshold: The rebate threshold has been raised from 5 lakh to 7 lakh. This indicates that a person with a salary of less than 7 lakh per year is not need to make investments in order to qualify for exemptions.
Standard deduction: The old system's 50,000 deduction remains in place. Now that the new administration has access to this facility, a salaried individual making at least 5.15 lakh rupees annually will gain 52,500 rupees.
Income tax brackets Below are the new tax rates:

Up to 3 Lakh per year in salary: Nil
5% from 3 lakh to 6 lakh
10% from 6 lakh to 9 lakh
15% from 9 lakh to 12 lakh
12 to 15 lakh rupees: 20%
30% over Rs. 15 lakh

5. LTA: The cash-out ceiling for leave travel allowance, which had been set at 3 lakh since 2002, has now been increased to 25 lakh.

6. There are no long-term capital gains tax benefits for investments in debut mutual funds; instead, short-term capital gains will be taxed, not the current long-term capital gains. This implies that long-term tax advantages will no longer be available to investors.

7.Market-linked debentures (MLDs) are short-term capital assets as of April 1. The effect of such a move on the mutual fund industry will be "somewhat unfavourable," according to experts.

8. Life insurance policies: Any premium proceeds exceeding Rs. 5 lakh per year would be subject to taxation.

9. Senior citizen benefits: The maximum deposit amount under the senior citizen’s savings scheme has increased from 15 to 30 lakh, from 4.5 lakh to 9 lakh, and from 7.5 lakh to 15 lakh for the monthly income scheme (single and joint accounts respectively).

10. Conversion of physical gold to an electronic gold receipt (EGR) or vice versa will not result in a capital gains tax gain.

28 Mar

Santosh Dantani

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