Income tax is a major component of the budget. Here are some major updates made to the Income Tax in the Union Budget 2023. The Union Finance Minister Nirmala Seetaraman announced a few changes during her budget speech on the 1st of February 2023 for the upcoming financial year 2023-2024. These changes are going to be applicable from 1st April 2024. Now the new regime has increased the rebate limit to 7 Lakhs instead of 5 Lakhs in the old regime.

1. 1
Nirmal Dwivedi
Assistant Professor
Department of BBA & BBA (IB)
MIT Arts, Commerce and Science College, Alandi, Pune
By Nirmal Dwivedi

2. Section 115BAC aka New Regime
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A new section 115 BAC was added in the Finance
Act of 2020 giving tax payers an option to choose
between Old and new regime.
New Regime does not allow deductions and
exemptions
By Nirmal Dwivedi

3. New Rates under new regime
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Up to ₹ 3,00,000 Nil
₹ 3,000,000 - ₹ 6,00,000 5%
₹ 6,00,000 - ₹ 9,00,000 10%
₹ 9,00,000 - ₹ 12,00,000 15%
₹ 12,00,000 - ₹ 15,00,000 20%
Above ₹ 15,00,000 30%
By Nirmal Dwivedi

4. Slab Rates for AY 2023-24 – Old Regime
Individual/ HUF/ AOP/ BOI/ Artificial Juridical Person
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By Nirmal Dwivedi

5. Tax Rates for Senior Citizens
It is to be noted that for a senior citizen (being a
resident individual who is of the age of 60 years but
not more than 80 years at any time during the
previous year), the basic exemption limit is ` 3,00,000.
Further, resident individuals of the age of 80 years or
more at any time during the previous year, being very
senior citizens, would be eligible for a higher basic
exemption limit of ` 5,00,000.
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By Nirmal Dwivedi

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New Slab Rates
Basic Exemption Limit increased
from 250,000 to 3,00,000
New regime is the default
regime
Choosing back and forth between new
and old regime is allowed only once
Rebate u/s 87A is now up to
7,00,000
Major Updates
in the New
Regime
By Nirmal Dwivedi

7. 7
Standard Deduction of Rs 50,000
(52,500)
Family Pension u/s 57 exemption,
lower of 15,000 or 1/3 of the
pension received
Employer’s Contribution under
Agniveer Corpus fund u/s 50CCH(2)
Employer’s Contribution to Pension
fund u/s 80CCD(2)
Deductions
allowed in the
New Regime
By Nirmal Dwivedi

8. 8
➢ Surcharge on Income
above 4 Cr reduced from
37% to 25%
➢ Capital Gains Exemption
u/s 54 & 54F limited to 10
Cr now
➢ Leave Encashment
Exemption limit increased
from 3L to 25L now
By Nirmal Dwivedi

9. Sum received on the maturity of life insurance is exempt
only if the aggregate annual premium is up to 5,00,000
w.e.f 1.4.2023
Senior Citizen Saving Scheme limit increased
from 15L to 30L
Mahil Samman Saving Scheme Certificate a one-time
small saving scheme up to Rs 2,00,00 with
interest@7.5%
By Nirmal Dwivedi 9

10. Presemptive Taxation u/s 44 &
44AD limit increased to Rs 3Cr
and 75 Lakh for Businesses and
Professionals respectively
Concessional Tax rate of 15% (+10%
SC) for Manufacturing Coperative
Societies setup after 01.04.23 and
starting production before 31.03.24
Deduction allowed on expenses
only on payment basis to MSME
within 45 Days or 15 Days u/s
43B
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By Nirmal Dwivedi

11. Vivad se Viswas 2.0 to be setup a commercial dispute redressal
scheme
Winning from online games to be taxed @30% plus applicable SC
and Cess
Cost of Acquisition of Intagible Assets is Nil
Carry forward of Losses for startups is now increased from a
period of 7 years to 10 years subject to shareholders remain
100%
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By Nirmal Dwivedi

12. Thank You
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By Nirmal Dwivedi