What Budget document tells us about new Income Tax slab

The new tax regime, introduced in budget 2020, is the now the default regime to pay tax. The old one, however, has not been discontinued, and citizens can continue to pay tax under either, based on their choice.

Finance minister Nirmala Sitharaman on Wednesday made as many as five announcements related to personal income tax, as she presented Union Budget for the financial year 2023-24. This was her fifth consecutive Budget, and also the last full one of the Modi government before the next Lok Sabha polls, which will take place in April-May next year.

Changes have been made only to the new tax regime, while the old one has been left untouched (Representational Image)

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One of the announcements made by Sitharaman on personal income tax – there was none in this field in last year's Budget – was on the change in slabs under the new tax regime.

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Here's what the Budget document said on the new slabs:

A look at the income tax slabs under the new versus old tax regime.

“The second proposal relates to middle-class individuals. I had introduced, in the year 2020, the new personal income tax regime with six income slabs starting from ₹2.5 lakh. I propose to change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to ₹3 lakh,” said Sitharaman in her speech.

Additionally, the new regime will also be the default regime now. The old one, however, has not been discontinued; this, therefore, means citizens can continue to pay tax under either, based on their choice.