As we approach the new FY 2023-24, we must know about the new income tax rules that will come into effect. The Finance Bill proposed in the Budget 2023 will be enforced from April 1, 2023. Knowing the changes in income tax rules beforehand will help you plan your finances and make necessary changes in your portfolio in time.
Here are some of the new tax rules that will be applicable from April 1, 2023:
Reduction In TDS
No TDS will be deducted for salaried taxpayers who have opted for the new tax regime and have taxable income below ₹7,00,000. This is due to the additional rebate provided under Section 87A of the Income Tax Act. Moreover, the applicable surcharge for individuals whose taxable income is above ₹5 Crore will be reduced from 37% to 25% under the new tax regime.
Changes In Income Tax Slabs
Finance Minister Nirmala Sitharaman introduced new income tax slabs under the new tax regime. The new income tax slabs are as follows:
₹0-₹3 Lakh - nil
₹3 Lakh -₹6 Lakh - 5%
₹6 Lakh -₹9 Lakh - 10%
₹9 Lakh -₹12 Lakh - 15%
₹12 Lakh -₹15 Lakh - 20%
Above ₹15 Lakh - 30%
No Tax On Conversion of Gold to Electronic Gold Receipt (EGR)
The conversion of physical gold to EGR and vice versa by a SEBI-registered vault manager will be done free of any capital gain tax.
Tax On Net Winnings From Online Games
Under Section 115BBJ of the Income Tax Act, the TDS winnings from online games will be taxed at 30%.
Limit On Section 54 And Section 54F Benefits
Section 54 of the Income Tax Act allows a taxpayer to claim benefits on selling his/her residential house and acquiring another residential house from the sale proceeds, while Section 54F offers tax on the long-term capital gains from the sale of any capital asset other than a house property.
From FY 2023-24, gains of only up to ₹10 Crore will be exempted under Sections 54 and 54F. Any balance capital gains above ₹10 Crore will be taxed at a rate of 20% with indexation.
Increase In Capital Gains On Market-Linked Debentures
Market-linked debentures offer fixed returns based on the underlying market index’s performance. From FY 2023-23, the capital gains from the transfer, redemption, or maturity of market-linked debentures will be deemed as short-term capital gains and will be taxed as per the applicable income tax slab rates. Earlier such gains were considered to be equity in nature and were taxed at 10%-15% based on the instrument’s holding.
Now that you know about the new income tax rules, it’s time to plan your taxes for the new financial year. Here are 5 Reasons To Start Tax Planning For FY 2023-2024 Now.
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