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NEW DELHI: The Finance Ministry has offered a marginal tax relief to small income taxpayers, under the new tax regime, whose income exceeds Rs. 7 lakh to correct a mathematical anomaly. This relief will be available from April 1, for the financial year 2023-24
The new tax slabs under the new tax regime offer a tax rebate of Rs 25,000 to individual taxpayers whose taxable income is up to Rs 7 lakh. Thus, they end up paying zero tax on their taxable income up to Rs 7 lakh. However, if a taxpayer has an income of just a hundred rupees more (ie: Rs 700,100) he/she ends up paying tax of Rs. 25,010. In other words, an additional income of just Rs. 100 results in a tax outgo of Rs. 25,010 – before cess. Hence marginal relief is now provided to ensure that the tax payable should not be more than the income which exceeds Rs. 7 lakh (which in this illustration is Rs. 100).
This marginal tax relief is likely to benefit taxpayers whose taxable income (after claiming eligible deductions) is between Rs 7 lakh and Rs 7.3 lakh.
The new tax slabs under the new tax regime offer a tax rebate of Rs 25,000 to individual taxpayers whose taxable income is up to Rs 7 lakh. Thus, they end up paying zero tax on their taxable income up to Rs 7 lakh. However, if a taxpayer has an income of just a hundred rupees more (ie: Rs 700,100) he/she ends up paying tax of Rs. 25,010. In other words, an additional income of just Rs. 100 results in a tax outgo of Rs. 25,010 – before cess. Hence marginal relief is now provided to ensure that the tax payable should not be more than the income which exceeds Rs. 7 lakh (which in this illustration is Rs. 100).
This marginal tax relief is likely to benefit taxpayers whose taxable income (after claiming eligible deductions) is between Rs 7 lakh and Rs 7.3 lakh.
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