Budget 2023: FM Sitharaman proposed to extend Rs 50,000 standard deduction to salary earners under new tax regime

Budget 2023: Each individual having an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500, FM said.

Budget 2023: FM Nirmala Sitharaman's announcements related to the income tax brought some relief to the masses this time. (Image: Pixabay)

A recent proposal by Finance Minister Nirmala Sitharaman to extend a Rs 50,000 standard deduction to salary earners under new tax regime brought some relief to the masses.

For the salaried class and the pensioners including family pensioners, the Finance Minister has proposed to extend the benefit of the standard deduction to the new tax regime. From now onwards, the new tax regime will be considered the default tax regime. Each individual having an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500, she said.

For those falling under the highest tax bracket, the Finance Minister proposed to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new tax regime. Sitharaman in her budget speech asserted that this proposal would result in a reduction of the maximum tax rate to 39 per cent. Previously, the effective tax rate for those in the highest tax bracket was 42.74 per cent.

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Budget 2023 Announcement