Starting from April 1, here are 6 important Income Tax changes you need to know

Income Tax
Income Tax

The 2023 union budget which was presented by Minister of Finance Nirmala Sitharaman proposed several changes from rebate limit to new income tax slabs. In this article let’s dig deep into the proposed income tax changes that would be effective from 1st April 2023.

Tax Rebate

The limit for tax rebate has been increased to Rs.7 Lakhs. Earlier the tax rebate limit was Rs.5 Lakhs.

Leave Travel Allowance (LTA)

The encashment limit for leave travel allowance has been raised to whooping Rs. 25 Lakhs. This is quite a jump since the earlier encashment limit was Rs. 3 Lakhs.

Physical Gold and Electronic Gold

According to new changes, there would be no capital gain tax on the conversion of Electronic Gold Receipts to Physical Gold. In addition to that, there will be no capital gain tax on the conversion of physical gold to Electronic Gold Receipts.

Life Insurance Proceeds from Premium

Proceeds arising from life insurance premium would be taxable if the premium crosses limit of Rs.5 Lakhs annually.

Tax Slabs

There would be a significant change in the tax slab. Refer to the table below –

Annual IncomeRate of Tax
Till Rs.3 lakh Nil
Greater than Rs.3 lakh – Rs.6 lakh5% of the total income
Greater than Rs.6 lakh – Rs.9 lakh 10% of the total income
Greater than Rs.9 lakh – Rs.12 lakh 15% of the total income
Greater than Rs.12 lakh – Rs.15 lakh20% of the total income
Greater Rs.15 lakh30% of the total income
Income Tax Slab from 1st April 2023

Investments in MLDs

Investments in Market Linked Debentures(MLDs) will be taxable under short term capital gain tax.

In addition to above there are some income tax changes that would be effective from April 1 2023. But we feel that these are the most crucial ones.

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