Last updated: Feb 03, 2023 5:40 PM IST
A person’s income tax rate is determined by the tax group in which they are located. (Image: Shutterstock)
Explanation: Under the new income tax system, the maximum income tax refund that employed and individual taxpayers can claim has increased from 5 lakhs to 7 lakhs.
Income tax rates for 2023-24 have undergone a significant revision in line with the new income tax scheme. Under the new income tax system, the base amount of the exemption has been increased to 3 million rupees. Under the new income tax system, the maximum income tax refund that employed and individual taxpayers can claim has increased from 5 lakhs to 7 lakhs.
Calling the new tax system the “best” and “least complicated”, Union Finance Minister Nirmala Sitharaman told News18 on Friday that the government had not set a time frame for the new regime.
“I didn’t give a date… Every Indian has to make his choice. I would say that a lower tax rate is better… I would say that this would be the best system and the least complicated,” she said. “If the taxpayer has more money left, he can decide where to invest his money. I don’t underestimate the taxpayer.” READ MORE
But how to move from the old tax regime to the new tax regime?
- Both the old and new tax regimes are options that the government has given to employees. As a rule, a decision should be made at the beginning of the financial year, but if you have already decided on the previous tax regime, and then find a new system that is significantly more profitable for you, You can switch to the new system when you file your income tax return.
- Such salaried taxpayers who also have business income must file Form 10-IEArchit Gupta, founder and CEO of Clear, a service that provides tax filing assistance, told Outlook in a report. This is a declaration by taxpayers that they have either decided to participate in the new tax system or have abandoned it.
- According to Gupta, if someone wants to opt for or opt out of the new tax regime and has an income under the heading Business and Profession Profits (PGBP), they must file Form 10-IE. A person can simply choose a new regimen when filing ITR 1 or 2 if they have no company or professional income.
- Sujit Bangar, founder of Tax Buddy, a company that assists with tax filing, told Outlook: “If an employee is engaged in any business, their income will be subject to wages and PGBP. Some examples of these activities include trading stocks, futures and options (F&O), commodities or commodity derivatives, freelancing, making money from YouTube or other content publishing platforms, and creating content.”
- According to Bangar, when filing an income tax return, a taxpayer who receives both wages and business income must list each type of income separately under the headings “Wage” And “Profits and gains from a business or profession(PGBP). His total income will include these two. He is currently unable to file ITR-1, which is about payroll income. He needs to file ITR-3 or ITR-4 and declare both their business income and salary, the report said.
Read all the latest clarifications here
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