If your taxable income is under Rs 5 lakh per annum, you will not have to pay any tax, irrespective of which regime you choose.
This is because both the old and new tax regime offer rebate to individuals with incomes of up to Rs 5 lakh. Budget 2023 announcements will not affect this class of salaried taxpayers.
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The plethora of Budget 2023 announcements, therefore, will not have any impact on your take-home salary. However, you will have to file tax returns to claim the rebate if your income is between Rs 2.5-5 lakh.
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The rebate was introduced in the old tax regime in the interim Budget of 2019, just ahead of general elections. This mean tax relief of Rs 12,500 for those in this bracket. In Budget 2023, the rebate under the new tax regime has gone up to Rs 25,000, in line with the hike in eligible income limit.
A rebate does not reduce the tax payable for other income brackets, while a hike in basic exemption limit benefits all. So, under the new tax regime, all tax brackets will get a benefit of Rs 2,500 since the basic exemption limit has been raised to Rs 3 lakh.
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