Finance Minister Nirmala Sitharaman presented the 2022-23 Union budget in parliament on February 1. taxpayers will continue to pay the same tax rate, depending on the tax regime chosen for FY 2022-23.
Current income tax plates for individuals (resident or non-resident), 60 years or more but less than 80 years old at any time in the previous year:
Current income tax plates for individuals (resident or non-resident) aged 80 or older in the previous year:
As of April 1, 2020, an individual salaried taxpayer has been given the option to continue with the old tax regime and to use deductions/tax exemptions such as section 80C, 80D deductions, HRA, MJA tax exemptions, etc. or to opt for the new tax. regime and waiving about 70 deductions and tax exemptions. The new tax regime offers lower tax rates compared to the old tax regime.
Under both income tax regimes, a tax refund of up to Rs 12,500 is available to an individual taxpayer under Section 87A of the Income-tax Act, 1961. This would basically mean that individuals with net taxable income up to Rs 5 lakh will not pay no income tax, regardless of their chosen tax regime.
Another thing to keep in mind is that under the old tax regime, the basic exemption limit for an individual taxpayer depends on their age and residential status. However, under the new tax system, the basic exemption limit is Rs 2.5 lakh in a fiscal year.
There are two important points that should be noted according to the website of the Tax Authorities:
-The rates of the supplement and the healthcare and education levy are the same under both tax regimes (old and new).
– Discount u/s 87 – A resident whose total income does not exceed Rs 5,000,000 is also eligible for a discount of up to 100 percent of income tax or Rs 12,500, whichever is the lower. This discount is available in both tax regimes.
In the 2021 Union budget, Finance Minister Nirmala Sitharaman announced that seniors over 75, who have only pension and interest as a source of income, will be exempt from filing income tax returns. During her budget speech, Sitharaman said: “In the 75th year of our country’s independence, the government will reduce the compliance burden for seniors aged 75 and over.”
It should be noted that the seniors who are over 75 years of age are not exempt from paying taxes, but only from filing income tax returns (ITR) if they meet certain conditions. The exemption from filing income tax returns would only be available in the event that the interest income is earned at the same bank where the pension is deposited.
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