In her eighth consecutive Union Budget, Finance Minister Nirmala Sitharaman has announced a major relief for the middle class in India. People with an annual income of up to Rs 12 lakh will not have to pay any income tax, owing to a tax rebate and the availability of a standard deduction of Rs 75,000 under the new tax regime. However, tax experts state that individuals with zero tax liability are still required to file an income tax return, leading to a cleaner financial record.
Budget 2023: Relief for Middle Class with 'No Tax' Regime
In a major step towards providing relief to the middle class, Finance Minister Nirmala Sitharaman has announced a zero-tax regime for individuals with an annual income of up to Rs 12 lakh under the new tax regime.
Background
The Finance Minister has continuously emphasized the need to reduce the tax burden on middle-class taxpayers. In the previous budget, she had introduced the option of a new tax regime with lower tax rates but without certain deductions and exemptions. This year, she has further simplified the regime by offering a zero-tax liability for incomes below a certain threshold.
Key Features of the New Regime
Top 5 FAQs and Answers
Q: Who is eligible for the 'no tax' regime? A: Individuals with an annual income of up to Rs 12 lakh.
Q: What is the difference between the new and old tax regimes? A: The new regime offers lower tax rates but no deductions or exemptions, while the old regime offers higher tax rates but with deductions and exemptions.
Q: Do I have to file an income tax return even if I have zero tax liability? A: Yes, individuals with zero tax liability are still required to file an income tax return.
Q: What are the benefits of filing an income tax return? A: It helps maintain a clean financial record, can be used as proof of income for various purposes, and can speed up the processing of loans and other financial transactions.
Q: What is the deadline for filing an income tax return? A: The deadline for filing an income tax return for the financial year 2022-23 is July 31, 2023.
Conclusion
The announcement of a 'no tax' regime for the middle class is a welcome step that will provide substantial relief to lakhs of taxpayers. It simplifies the tax system, reduces compliance burden, and leaves more disposable income in the hands of middle-class individuals. However, it is important for taxpayers to carefully consider their options and choose the tax regime that is most beneficial to them based on their individual circumstances.
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