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Budget 2023: Finance Minister Nirmala Sitharaman introduced the country’s next general budget for fiscal year 2023-24 in Parliament on February 1, 2023. In this budget, under the new fiscal regime, the government has announced that no income tax will be charged up to Rs 7 lakh. Along with this, for the first time, it has also been decided to give a standard deduction of Rs 52,500. Let us tell you that Finance Minister Nirmala Sitharaman has not made any changes to the old tax system. Let us know what is the standard deduction included in the new tax regime??
What is the standard deduction? (What is the standard deduction)
The standard deduction is the part of the income that is taxed after the deduction. For example, understand that if you adopt the new tax regime, then you will not have to pay any tax on earnings up to Rs 7 lakh. But another Rs 52,500 can be saved by using the standard deduction. People who earn Rs 15.5 lakh or more in a year will get this benefit by adopting the new tax regime. Finance Minister Nirmala Sitharaman said: “I propose to give the benefit of standard deduction also in the new tax regime. Salaried individuals whose income is Rs 15.5 lakhs or more will get a benefit of Rs 52,500 under this.
What became cheaper and what became more expensive in the budget, find out here
Even after the introduction of the new tax system, most taxpayers were adopting the old tax system. To link them with the new tax regime, the government has granted the exemption of the first standard deduction. Let me tell you, in the new tax regime, the taxpayer does not have the option to save money through 80C, 80D. For this reason, people were holding back from adopting the new tax system.
Please note that if you do not choose any of the old and new tax regime options during income tax filing, you will become part of the new tax regime by default.