In her budget speech, Sitharaman promised an increase in the annual standard deduction from Rs. 50,000 to Rs. 52,000. This announcement has been made for the salaried class as well as pensioners, family pensioners, for whom Finance Minister Nirmala Sitharaman has extended the benefit of standard deduction in the new tax regime. Therefore, any salaried individual earns 15.5 lakh or more will be eligible to get the benefit 52,500.
Commenting on the announcement, Nikhil Sharma, Chief Revenue Officer, FINTU, said, “At present, the government is giving standard deduction of Rs. 50,000/- only to salaried employees and pensioners who have opted for the old tax regime. Budget 2023 In, this benefit is proposed to be extended to the new tax regime as well. Thus, as compared to the previous new tax regime, it will give an additional disposable income of Rs.37,500/- to taxpayers having an income of Rs.7.5 lakhs. Similarly , benefit of Rs. 52,500/- to taxpayers having income of Rs. 15.5 lakh and above. Therefore, considering exemption under section 87A and standard deduction under section 16, all salaried employees and pensioners with income up to Rs. No tax will be payable on 7,50,000/-.”
Mr. Abhishek Dev, CEO & Co-Founder, Epsilon Money Mart, said, “Simplification of tax structure, higher exemptions and reduction in effective/total tax rates are all welcome steps in this very balanced and growth-oriented budget. This will encourage both savings and consumption. Which is good for the economy. It also shows the strong belief that the government has in development which is a big positive.”
Archit Gupta, Founder & CEO, ClearTax said, “Pensioners opting for the new tax regime will get the benefit of standard deduction apart from lower tax rates. To avail leave encashment on retirement, the exemption limit has been increased to 25 lakh 3 lakhs.”
Apart from this, in terms of personal taxation, FM has also made major announcements in Budget 2023 such as increase in exemption limit from 7 lakhs 5 lakh under the new tax regime, reducing the number of slabs to five and increasing the tax exemption limit 3 lakhs onwards 2.5 lakh, reduction in the highest surcharge rate from 37 percent to 25 percent in the new tax regime, increase in the tax exemption limit on leave encashment 3 lakhs onwards 25 lakhs.
Dr. Suresh Surana, Founder, RSM India said, “Overall, the Finance Budget 2023 is positive and aims to benefit the middle and lower income groups and taxpayers at large to default to the new tax regime based on revised slabs. Will go and be reduced. Number of slabs with standard deduction.”
Mr. Abhishek Dev, CEO & Co-Founder, Epsilon Money Mart, said, “Simplification of tax structure, higher exemptions and reduction in effective/total tax rates are all welcome steps in this very balanced and growth-oriented budget. This will encourage both savings and consumption. Which is good for the economy. It also shows the strong faith of the government on development which is a big positive.”
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