Highlights of Changes Proposed in the New Tax Regime [Section 115BAC]

  • Blog|Budget|Finance Act|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 21 March, 2023

New Tax Regime

1. The new tax regime under section 115BAC is now the “Default Tax Regime”. Taxpayers can still opt to pay under the old tax scheme.

2. In addition to Individuals and HUFs, now AOP, BOI and Artificial Juridical Persons will also be covered under section 115BAC.

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3. Revised slab rates under section 115BAC are as follows:

Net Income Range Tax Rate
Upto Rs. 3,00,000 Nil
From Rs. 3,00,001 to Rs. 6,00,000 5%
From Rs. 6,00,001 to Rs.9,00,000 10%
From Rs. 9,00,001 to Rs. 12,00,000 15%
From Rs. 12,00,001 to Rs. 15,00,000 20%
Above Rs. 15,00,000 30%

4. The threshold limit of total income for rebate under section 87A for the default tax regime is increased from Rs. 5 lakhs to Rs. 7 lakhs, thus increasing the maximum rebate to Rs. 25,000.

5. Employees paying tax as per the default tax regime can now claim standard deduction under section 16.

6. The highest rate of surcharge for assessees under the default tax regime is reduced from 37% to 25%

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