Budget 2023: Income Tax Exemption Limit Likely To Get Extended From Rs 2.5 Lakh To Rs 5 Lakh

With little over a month left for India＊s Finance Minister Nirmala Sitharaman to present the Budget 2023 on February 1, 2023, the government seems to be preparing to give some good news to taxpayers.

Income Tax Exemption Limit May Be Increased To Rs 5 Lakh

The government is likely to enhance the income tax exemption limit to Rs 5 lakh from the existing Rs 2.5 lakh in the forthcoming budget for FY 2023每24, sources privy to the developments said, as per an IANS report.

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The move, if it fructifies, may leave more disposable income in the hands of taxpayers. It will also boost consumption, which may also lead to economic recovery, sources said, adding that the move would also promote investments.

As of now, the maximum slab of income that is not chargeable to income tax is Rs 2.5 lakh.

Now it remains to be seen what the Budget 2023 has in store, with taxpayers' expectations for relief being high amid rising recession fears, inflationary concerns, rising interest rates, and another surge in COVID cases knocking on the door globally.

Also Read: Budget 2023 To Focus On Growth & Inflation Concerns, Says FM Sitharaman

Current Income Tax Slabs

Income tax slabs are different for old and new tax regimes.

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For the old tax regime, the tax slabs were bifurcated across age groups, i.e., different for those below 60, above 60 (senior citizens), and above 80 (super senior citizens).

Income tax slabs for individual aged below 60 years & HUF

Income tax slab for individual aged above 60 years to 80 years

Income tax slab for Individual aged more than 80 years

As far as the new tax regime is concerned, the tax slabs for all age groups of individuals and HUFs are put under a single category

Also Read: 10 Tax Saving Options Other Than Section 80C

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