Budget 2023: New income tax regime to be the default tax regime

The new tax regime is now going to be the default tax regime, announced the Finance Minister during her Budget speech today. She stated that the government has taken a slew of measures to make the voluntary tax regime more attractive and will forego revenue in the process. 

“Moving forwards, the new tax regime will be the default. However, citizens can continue to use the old one too,” added Sitharaman. 

Till day, the old tax regime was the default tax regime. The tax payers had to manually opt for the new tax regime if they wanted to opt for the new tax regime. 

The limit of ₹3 lakhs for tax exemption on Leave Encashment limit raised to ₹ 25 lakhs

We are also making the new income tax regime the default tax regime however, citizens will continue to have the option to avail the benefits of the old tax regime #AmritKaalBudget pic.twitter.com/cnRJNUdCAv

— PIB India (@PIB_India) February 1, 2023

Finance Minister Nirmala Sitharaman on Wednesday allowed a Rs 50,000 standard deduction to taxpayers under the new regime. Besides, she also tweaked the slabs and hiked the rebate to Rs 7 lakh from Rs 5 lakh. In the new tax regime, assessees cannot claim deductions or exemptions on their investments.

She tweaked the concessional tax regime, which was originally introduced in 2020-21, by hiking the tax exemption limit by Rs 50,000 to Rs 3 lakh and reducing the number of slabs to five.

Watch the video on the updates on the tax regime 

Also Read : Budget Live Blog