Budget 2023 introduced several changes to the 'new income tax slab', which will be effective from April 1, 2023.
Standard deduction for salaried employees will be a part of 'new tax slab' from April 1, 2023. Additionally, each salaried person with an income of Rs 15.5 lakh or more will stand to benefit by Rs 52,500 as standard deduction.
The surcharge will be lowered from 37% to 25% for those earning more than Rs 5 crore a year under the 'new income tax regime'. This also brings down the highest tax rate from 42.74% to 39%.
The tax deducted at source (TDS) on online gaming applications will be effective from April 1, 2023. TDS on winnings from online games will be deducted for every rupee earned, net of entry fees (if any).
The investment in mutual fund where not more than 35% is invested in equity shares of Indian company (which is debt funds) will be considered as short-term capital gains. This means long-term capital gains will go away.
If premium paid by an individual for a savings life policy is more than Rs 5 lakh than on maturity the income from policy will be taxed. The threshold of Rs 5 lakh will be applicable on first year premium and not first year + renewal.
In case of withdrawals, where EPF account is not seeded with account holders' PAN card, TDS rate will come down to 20% from April 1, 2023 or from the beginning of FY24.
The limit of tax exemption on leave encashment on retirement of non-government salaried employees will be raised to Rs 25 lakh from April 1, 2023.
Converting physical gold to Electronic Gold Receipt and vice versa will not be considered a transfer and not attract any capital gains from April 1, 2023. This would promote investments in the electronic gold.
From April 1, the government will impose a Rs 10 crore cap on the reinvestment of capital gains from the sale of housing property under the provisions of Sections 54 and 54F of the income tax act.