Proposed Changes in Tax Rates-Budget 2023

Proposed Changes in Tax Rates-Budget 2023

• In the alternate tax regime under Section 115BAC, a revision to the basic exemption limit and the number of slabs has been proposed. The revised basic exemption limit shall be INR 3,00,000 and for every additional INR 3,00,000 of income, the next slab rate will be applicable. The highest  slab rate of 30% shall continue to apply to income above INR 15,00,000.
• The threshold limit for total income eligible for rebate under Section 87A has been proposed to be increased from INR 5,00,000 to INR 7,00,000 for assessees opting for the new tax regime.
• Under the new tax regime, the highest surcharge rate of 37% on income above INR 5,00,00,000
  has been proposed to be reduced to 25%
• The alternate tax regime of Section 115BAC is proposed to be applicable to Association of Persons (AOP)[(other than a co-operative society], Body of Individuals (BOI), and Artificial Juridical Persons (AJP).
• Standard deduction from salary income and deduction from family pension is proposed to be extended to employees who opt for New Tax Regime.
• The new tax regime under Section 115BAC is proposed to serve as the default regime.
• A new section 115BAE is proposed to be inserted, which provides for reduced rate of tax of 15% (plus surcharge of 10% and cess) for Manufacturing co-operative societies established on or after April 1st, 2023, and commencing production on or before March 31st, 2024 [provided that specified incentives or deductions are not availed]. Further, income not derived or incidental to manufacturing or production of an article or thing shall be taxed at 22%.
• Section 115BBJ is proposed to be inserted which provides the tax rate of 30% on any winning from online gaming