How to save tax if annual income is Rs 7 lakh - Income tax slab 2022-23

Save tax if annual income is Rs 7 lakh - The annoucement is a major push for salaried class taxpayer to switch to new tax regime where no exemptions on investments is provided.

The government of India has announced no tax for those with annual income of up to Rs 7 lakh. Image Source: PTI

Save tax if annual income is Rs 7 lakh - The government of India has announced no tax for those with annual income of up to Rs 7 lakh.

The announcement was made for those under the new tax regime in the Union Budget 2023-24.

No changes in old tax regime

No changes have been made for those who continue in the old regime in this year's Union Budget. The old regime provides for tax exemptions and deductions on investments and expenses such as HRA.

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Major boost for salaried class taxpayer

The annoucement is a major push for salaried class taxpayer to switch to new tax regime where no exemptions on investments is provided.

Standard Deduction allowed under new regime

The finance minister also allowed a standard deduction of Rs 50,000 under the new regime.

However, the old tax regime provides for a similar deduction and no tax on income up to Rs 5 lakh. Also, the basic exemption limit has been raised to Rs 3 lakh from Rs 2.5 lakh. A Rs 2.5 lakh basic exemption limit is prescribed in old tax regime.

How much will you save under new tax regime

7 lakh annual income	Saving of Rs 33,800
10 lakh annual income	Saving of Rs 23,400
15 lakh annual income	Saving of Rs 49,400

Relief to high salaried people

This year's Budget also reduced surcharge from 37 per cent to 25 per cent for high net worth individuals with income above Rs 2 crore. This would translate into a saving of around Rs 20 lakh for those having a salary income of about Rs 5.5 crore.

Income tax slab 2022-23 - New tax regime

Income	Tax
Rs 0-3 lakh	No Tax
Rs 3-6 lakh	5 per cent
Rs 6-9 lakh	10 per cent
Rs 9-12 lakh	15 per cent,
Rs 12-15 lakh	20 per cent
Rs 15 lakh and above	30 per cent

The scheme, however, has not gained traction as in several cases it resulted in higher tax burden. With effect from April 1, these slabs will be modified as per the Budget announcement.

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