Union Budget 2023: Difference between new tax regime and old tax regime

Finance Minister Nirmala Sitharaman has announced major tax relief for salaried people along with changes in tax slabs in Budget 2023. Now up to 7 lakhs no tax has to be paid. However, there is a problem with the new tax system.

Tax is not payable till the income reaches 7 lakhs, but there is confusion about the amount after that. In fact, the Finance Minister clearly stated in his speech that no tax will be levied up to 7 lakhs in the new tax system. But they have also kept the old tax system in place.

Till now no tax was payable upto 5 lakhs in old and new tax system. But in the new tax regime, this exemption has been increased from 5 lakhs to 7 lakhs.

In the new tax regime, people with income up to 7 lakhs will have to pay zero tax. But along with this, he has also announced changes to the old tax system. 2.5 lakh exemption in the old tax system has been increased to 3 lakh.

In the new tax regime, people with income up to 7 lakhs will have to pay zero tax. But along with this, he has also announced changes to the old tax system. 2.5 lakh exemption in the old tax system has been increased to 3 lakh.

New Tax Slab - 0% tax on income between 0 to 3 lakh rupees 5% tax on income between 3 and 6 lakh rupees 10% tax on income between 6 and 10 lakh rupees 15% tax on income between 9 and 12 lakh rupees 20% tax on income between 12 and 15 lakh rupees.

What is the equation? - According to the new tax slab, those whose income is up to 7 lakhs will not have to pay any tax. But if your income is more than Rs 1 lakh, you will not have to pay tax up to Rs 3 lakh. 5 percent tax for remaining 4 lakhs.

If your income is more than 7 lakhs then you have to pay 15 thousand tax upto 6 lakhs. That means you will be in the 5 percent tax bracket. If your income is 9 lakh rupees then you have to pay tax of 45 thousand rupees. Income more than 12 lakhs.