New Income Tax Regime: Key Changes Coming Into Effect from April 1


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	Blog Categories All Corporate Laws (1) Direct Tax (2) Indirect Tax (3) Trademarks (2) New Income Tax Regime: Key Changes Coming Into Effect from April 1 Category: Direct Tax, Posted on: 01/04/2023 , Posted By: Nikhil Israni Visitor Count:328 New Income Tax Regime: Key Changes Coming Into Effect from April 1 As we begin a new financial year, there are significant changes in the income tax regime for debt funds that will impact individuals and businesses. From April 1, 2023, the new tax regime will become the default option, although individuals can choose the older regime if they prefer. Let's take a closer look at some of the key highlights. For Individuals: New Tax Regime: The new tax regime will become the default option. Individuals will have the option to choose the old regime. Changes in Income Tax Slabs: The new tax rates are 0-3 lakh - Nil, 3-6 lakh - 5%, 6-9 lakh- 10%, 9-12 lakh - 15%, 12-15 lakh - 20%. Leave Encashment: The limit for tax exemption on leave encashment on retirement of non-government staff has been increased to Rs 25 lakh from 3 lakh. Tax Rebate: The rebate under section 87A will be hiked to ensure that individuals will have to pay ZERO tax if their income is under Rs 7 Lakh. Debt Mutual Funds: Debt mutual funds with less than 35% investment in equity shares will be taxed according to the slab rate. Hence, the indexation benefit has come to an end for these instruments. Capital Gain Exemption: For HNIs availing high-value capital gain exemption by reinvesting in luxury apartments, tax deduction will be capped at 10 crores. Senior Citizen Savings Scheme: The maximum deposit limit for senior citizen savings scheme will be increased to Rs 30 lakh from 15 lakh. Costlier Cars: New vehicles have to comply with the phase 2 of BS6 emission norms, which will lead to a hike in prices. Life Insurance Policies: Proceeds from life insurance premiums over the annual premium of ₹5 lakh would be taxable from the new financial year i.e. from 1st April 2023. Finance Minister Nirmala Sitharaman, while presenting Budget 2023, also announced that the new income tax rule won't be applicable on ULIP (Unit Linked Insurance Plan). For Businesses: Online Gaming: TDS introduced on net winnings of users at a rate of 30% on every winning. Audit Trail: Accounting software used to maintain books of accounts must have mandatory audit trail facility with features to create edit logs of each change made. Home Loan Capital: Home loan providers need to provide more capital on their portfolio. Insurance Commissions: Life, general and health insurance will get the flexibility to pay commissions to agents according to board-approved policies within the overall expenses of management ceiling. It's important to note that these changes will impact individuals and businesses differently, and it's recommended to consult a tax expert to understand how these changes will affect your financial planning. Disclaimer: The content of the blog does not create any responsibility of the firm / its authorized persons whose website is being accessed. The blog is not for legal use. Kindly verify the correctness of data/contents from your own sources. This is only for information purpose. Add a Comment Name: Your Comment: View Comments (0)

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