9 Facts about New Income Tax Regime: Finance Act 2023

Salaried Taxpayers are required to choose between the New or Old Tax Regime in the month of April 2023, for the purpose of deduction of TDS. Here are a few pointers that would help you decide which regime to choose.

1. Zero Tax at Rs. 7.5 Lakhs: If your salary is up to 7.5 Lakhs New Tax Regime is perfect for you.

2. Old Tax Regime will be beneficial when total deductions are Rs. 3.75 lakhs or more at any Income level.

Income Tax Calculator: https://incometaxindia.gov.in/Pages/tools/115bac-tax-calculator-finance-bill-2023.aspx

3. Choice also depends on the combination of Income and deductions. For Example, if you have a Deduction u/s 80C of Rs. 150,000 same will not be useful as Tax will still be less in New Tax Regime.

4. Default Regime: New Tax Regime is the default Regime.

5. Salaried Taxpayer is required to choose between the New or Old tax Regime in the beginning of the Financial Year and the same Cannot change in the Mid of the Financial Year once the choice is made. However, changes can be made at the time of ITR Filing. Still choosing the wrong tax regime can lead to cash blockage of because of High TDS, so be very careful in choosing the tax regime.

6. Switch between Tax Regime: Salaried Taxpayers have the option to switch every year. Taxpayers having Income from business and Profession can switch only once in their Lifetime.

7. Taxpayers opting for New Tax-Regime should ensure timely filing of ITR.

8. New Tax Regime is the same for Individuals & HUF upto 60 years of age, Senior citizens above 60 years upto 80 years , and Super senior citizens above 80 years. No distinction in slab, based on age of Taxpayer.

9. Cess is applicable in case of New Tax Regime as well. Surcharge as per applicable slabs is applicable in New Tax regime.