New Rules: New financial year in India starts today on 1st April. With the new financial year, many new tax related rules come into effect.
Economic conditions and needs change rapidly. According to these, the governments take policy decisions to improve the standard of living of the people. Generally the new financial year in India starts today on 1st April. With the new financial year, many new tax-related rules come into effect. The interim budget proposals presented by Union Minister Nirmala Sitharaman ahead of the Lok Sabha elections will be implemented from today. Certain rules regarding tax slabs, insurance policies, standard deductions will change. Let’s see what are the key things that will change from April 1.
Tax on insurance policy maturity proceeds
Now you have to pay tax on the maturity proceeds from the life insurance policy. Finance Minister Nirmala Sitharaman announced this. Any policies issued on or after April 1, 2023 will be covered by this rule. Only individuals whose total premium is above Rs.5 lakh will have to pay this tax.
Tax savings on income above Rs.5 crores
Those with an annual income of more than Rs 5 crore will also get huge benefits from April 1. The government has reduced the surcharge by 12 percent on income above Rs 5 crore. Earlier it was 37 percent. It will be 25 percent from April 1. This benefit is available only to individuals opting for the new tax regime.
Tax benefits for private employees
If you work in the private sector and take less leave, you can get a tax exemption on the money you get in lieu of leave. Earlier, if a non-government employee took money from the company in lieu of his remaining leave, the tax exemption was only up to Rs 3 lakh. But now this limit has been increased to Rs.25 lakh.
Default tax policy
To file tax you have to choose either old tax system or new tax system. If not selected, the new tax regime will automatically apply from April 1. Under the new tax regime, no tax is payable on income up to Rs 7 lakh. If you want to save tax on investments, the old tax system is better.
Standard deduction in new tax system
Previously, standard deduction of Rs.50 thousand was available only under the old tax regime. Now it has been included in the new tax system. Tax exemption is available on Rs.50 thousand under standard deduction. After standard deduction up to Rs.7.5 lakh no tax is payable. Some individuals get good benefits from tax exemption under Section 87A of the Income Tax Act. Due to this concession, individuals whose total income is less than Rs.5 lakh will get a tax exemption of up to Rs.12,500.
