5 important tax rule changes from April 1: Check here

CHENNAI: The financial year 2023–24 commencing on April 1 will have several changes in tax.

Many decisions, including an increase in the income tax limit and an increase in the deposit limit for senior citizens, will be implemented from today.

Here are the 5 major changes:

1. Increase in tax exemption:

Income tax-related changes announced in Budget 2023 will be implemented from today. Earlier, the income tax threshold under the old and new tax rules has been changed from Rs 5 lakh to Rs 7 lakh. This means that employees with an annual income of up to Rs 7 lakh will not have to pay any tax.

The default option is to file a new income tax return. Taxpayers are also given the facility to choose their preferred tax regime.

2. Change in tax slabs:

Tax slabs have also been changed in this budget. In 2020, the six exemptions announced for paying income tax have now been changed to five.

The income tax ceiling has been raised from Rs 2.50 lakh to Rs 3 lakh. Thus, those earning less than Rs. 3 lakh in annual income need not pay tax.

*Income tax is 5% for those earning between Rs 3,00,001 and Rs 6 lakh.

*For Rs 6,00,001 to Rs 9 lakh is 10%.

* Earnings from Rs 9,00,001 to Rs 12 lakh have to pay 15% tax.

* Those earning from Rs 12,00,001 to Rs 15,00,000 have to pay 20% tax.

*Those earning an annual income of more than Rs 15 lakh have to pay 30 per cent tax.

3. Standard Deductible Benefit:

There is no change in the standard deduction of Rs. 50,000 given to employees under the old tax system. The Finance Minister announced the extension of standard deduction benefits to the new tax regime for pensioners. Every salaried employee with income of Rs 15.5 lakh or above will receive up to Rs 52,500.

4. Senior Citizen Deposit Limit:

From April 1, the investment limit in the Citizen Savings Scheme will be raised to Rs 30 lakh instead of Rs 15 lakh. Also, the investment limit under the Monthly Income Scheme (MIS) has been increased from Rs 4.5 lakh to Rs 9 lakh and under a joint account from Rs 9 lakh to Rs 15 lakh.

5. Tax on insurance policies:

Up until March 31st, the maturity amount of a life insurance policy has been set to zero. In 2023, the insurance policy premium purchased after April 1 that the central government has announced that if it exceeds Rs 5 lakh, the amount will be taxed.

It is to be noted that even if one or more policies exceed Rs 5 lakh, tax will be levied.