New Income Tax slabs FY 2023-24 and deductions allowed - check here
New Income Tax slabs FY 2023-24: Taxpayers are allowed to claim three deductions under the New Income Tax regime. The New Income Tax regime will also be the default option, starting financial year 2023-24.
New Income Tax Slabs FY 2023-24, Deductions: Finance Minister Nirmala Sitharaman tweaked the New Income Tax regime slabs while presenting the Union Budget 2023-23 to make it more attractive. She also declared that the New Income Tax regime will be the default option for taxpayers, effective from the financial year 2023-24. The new financial year will begin on April 2, 2023. Apart from announcing new slabs in the New Income Tax regime, Nirmala Sitharaman also allowed salaried class or taxpayers to claim 3 deductions. Let's take a quick look at the deducations allowed in the New Income Tax regime.
New Income Tax Slabs FY 2023-24
New Income Tax Regime Deductions, Rules
1. New Income Tax Slabs 2023-24: Standard Deduction
In a relief to salaried and pensioners, the government introduced a standard deduction of Rs 50,000 which can be claimed on salary and pension. A standard deduction is a flat deduction from the gross salary which means taxpayers do not have to apply separately for claiming a standard deduction.
This deduction was available in the old tax regime but has now been introduced in the new tax regime as well. A standard deduction of Rs 15,000 for the family pension is also proposed to be extended to pensioners who opt for New Tax Regime.
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2. New Income Tax regime deduction for Agniveer Corpus Fund
In the Budget 2023, a new deduction was proposed under section 80CCH which provides for deductions to individuals enrolled in Agnipath Scheme on or after November 1, 2022. Taxpayers under this scheme can claim a deduction equal to the amount of contributions made to the Agniveer Corpus Fund.
The Central government's contribution to the Agniveer Corpus Fund account of an individual enrolled in the Agnipath Scheme shall be considered as salary in accordance with the provisions of Section 17. A corresponding deduction shall be allowed under Section 80CCH for the same.
3. NPS deduction in Income Tax
Archit Gupta, CEO, ClearTax, said that taxpayers can also claim a deduction under section 80CCD(2) towards contributions to the National Pension System (NPS) made by the employer.
Under 80CCD(2), an employer's contribution to an employee's NPS will also be eligible for deduction. A private sector employee can claim 10 per cent of their salary which is a basic salary and Dearness Allowance whereas, in the case of a government employee, 14 per cent deduction is allowed.
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