Benefits in Budget 2023

February 25, 2023

BENEFITS:-

  1. Highest rate of surcharge has been removed under new scheme i.e. max surcharge 25% for the income above 2 crores. It has been reduced from 37% to 25%.

Surcharge means an additional tax to be paid by the taxpayers earning a higher income, beyond a certain limit set by the government. This is done to ensure that rich contribute to the income taxes more than poor.  

  With this highest rate of effective tax will now reduce to 39% (Normal tax rate 30%+ Surcharge 25%+ Health & educational cess 4%) from 42.74% (30%+37%+4%) for new regime.

  1. Standard deduction of Rs. 50,000 from salary, which was earlier not allowed under new regime, has now been made deductible. If salaried person with an Income of Rs. 15.5 lakhs or more then the deduction will be Rs. 52,500. 

Here Standard deduction means deducting a fixed amount from the salary income only.

  1. Exemption limit of leave encashment received at the time of retirement has been increased to 25 lacs from 3 lacs for Non-Government employees (For government employees whole amount is already exempt.)
  2. Tax rate of (15% + Surcharge 10% + Cess 4%) 17.16% for New Manufacturing Cooperative Societies.
  3.  Date of Incorporation for income tax benefits to start-ups to be extended from 31.3.2023 to 31.3.2024, for providing tax incentives to Entrepreneurs as an encouragement.
  4. Proposal to provide the benefit of carry forwarding of start-ups from 7 years to 10 years. The benefit of extra 3 years is given only to Start-up Companies as a concept of “Make in India” initiative. It can build a strong system for new and innovative ideas. 



Note: Above details are meant for generalized situations and shall not be used as a legal basis for any particular situation readers may have. We do provide tax consultations for specific scenarios and can be reached through our contact us form.



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