Ministry of Finance

MAJOR ANNOUNCEMENTS IN PERSONAL INCOME TAX TO SUBSTANTIALLY BENEFIT THE MIDDLE CLASS

PERSONS WITH INCOME UP TO RS. 7 LAKH WILL NOT PAY INCOME TAX IN NEW TAX REGIME

TAX EXEMPTION LIMIT INCREASED TO RS. 3 LAKH

CHANGE IN TAX STRUCTURE: NUMBER OF SLABS REDUCED TO FIVE

SALARIED CLASS AND PENSIONERS TO GAIN ON EXTENSION OF STANDARD DEDUCTION BENEFIT TO THE NEW TAX REGIME

MAXIMUM TAX RATE REDUCED TO 39 PER CENT FROM 42.74 PER CENT

NEW TAX REGIME TO BE THE DEFAULT TAX REGIME

CITIZENS TO HAVE THE OPTION TO AVAIL THE BENEFIT OF OLD TAX REGIME

Dated: 01 FEB 2023

With the objective of benefitting the hard working middle class of the country, Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitaraman made five major announcements with respect to personal income tax while presenting the Union Budget 2023-24 in Parliament today.  These announcements pertaining to rebate, change in tax structure, extension of benefit of standard deduction to the new tax regime, reduction of highest surcharge rate and extension of limit of tax exemption on leave encashment on retirement of non-government salaried employees will provide substantial benefits to the working middle class.

 

In her first announcement regarding rebate, she proposed to increase the rebate limit to Rs.7 lakh in the new tax regime, which would mean that the persons in the new tax regime, with income up to Rs. 7 lakh will not have to pay any tax. Currently, those with income up to Rs. 5 lakh do not pay any income tax in both old and new tax regimes.

Providing relief to middle-class individuals, she proposed a change in the tax structure in the new personal income tax regime by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lakh.  The new tax rates are:

Total income (Rs.)	Rate  (per cent)
Upto 0-3 lakh	Nil
From 3-6 lakh	5
From 6-9 lakh	10
From 9-12 lakh	15
From 12-15 lakh	20
Above 15 lakh	30

 

This will provide major relief to all tax payers in the new regime. An individual with an annual income of Rs. 9 lakh will be required to pay only Rs. 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25 per cent on what he or she is required to pay now, i.e. Rs. 60,000/-. Similarly, an individual with an income of Rs. 15 lakh would be required to pay only Rs. 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent from the existing liability of Rs. 1,87,500/.

The third proposal of the budget provides major relief to the salaried class and the pensioners including family pensioners as the Finance Minister proposed to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs. 15.5 lakh or more will thus stand to benefit by Rs. 52,500/-.  At present, standard deduction of Rs. 50,000/- to salaried individuals and deduction from family pension up to Rs. 15,000/- is currently allowed only under the old regime.

As part of her fourth announcement with respect to personal income tax, Smt. Nirmala Sitaraman proposed to reduce the highest surcharge rate from 37 per cent to 25 per cent in the new tax regime for income above Rs. 2 crore.  This would result in reduction of the maximum tax rate to 39 per cent from the present 42.74 per cent, which is among the highest in the world. However, no change in surcharge is proposed for those who opt to be under the old regime in this income group.

As part of the fifth announcement, the budget proposed extension of limit of tax exemption on leave encashment to Rs. 25 lakh on retirement of non-government salaried employees in line with the government salaried class. At present, the maximum amount which can be exempted is Rs. 3 lakh.   

The budget proposed to make the new income tax regime as the default tax regime.  However, citizens will continue to have the option to avail the benefit of the old tax regime.

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RM/PPG/RC
(Release ID: 1895286) 

DIRECT TAXES

Direct Tax proposals aim to maintain continuity and stability of taxation, further simplify and rationalise various provisions to reduce the compliance burden, promote the entrepreneurial spirit and provide tax relief to citizens.

Constant endeavour of the Income Tax Department to improve Tax Payers Services by making compliance easy and smooth.

To further improve tax payer services, proposal to roll out a next-generation Common IT Return Form for tax payer convenience, along with plans to strengthen the grievance redressal mechanism.

Rebate limit of Personal Income Tax to be increased to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any tax.

Tax structure in new personal income tax regime, introduced in 2020 with six income slabs, to change by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lakh. Change to provide major relief to all tax payers in the new regime.  

New tax rates

Total Income (Rs)	Rate (per cent)
Up to 3,00,000	Nil
From 3,00,001 to 6,00,000	5
From 6,00,001 to 9,00,000	10
From 9,00,001 to 12,00,000	15
From 12,00,001 to 15,00,000	20
Above 15,00,000	30

 

Proposal to extend the benefit of standard deduction of Rs. 50,000 to salaried individual, and deduction from family pension up to Rs. 15,000, in the new tax regime.

Highest surcharge rate to reduce from 37 per cent to 25 per cent in the new tax regime. This to further result in reduction of the maximum personal income tax rate to 39 per cent.

The limit for tax exemption on leave encashment on retirement of non-government salaried employees to increase to Rs. 25 lakh.

The new income tax regime to be made the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime.

Enhanced limits for micro enterprises and certain professionals for availing the benefit of presumptive taxation proposed. Increased limit to apply only in case the amount or aggregate of the amounts received during the year, in cash, does not exceed five per cent of the total gross receipts/turnover.

Deduction for expenditure incurred on payments made to MSMEs to be allowed only when payment is actually made in order to support MSMEs in timely receipt of payments.

New co-operatives that commence manufacturing activities till 31.3.2024 to get the benefit of a lower tax rate of 15 per cent, as presently available to new manufacturing companies.

Opportunity provided to sugar co-operatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure. This expected to provide them a relief of almost Rs. 10,000 crore.

Provision of a higher limit of Rs. 2 lakh per member for cash deposits to and loans in cash by Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs).

A higher limit of Rs. 3 crore for TDS on cash withdrawal to be provided to co-operative societies.

Date of incorporation for income tax benefits to start-ups to be extended from 31.03.23 to 31.3.24.

Proposal to provide the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years.

Deduction from capital gains on investment in residential house under sections 54 and 54F to be capped at Rs. 10 crore for better targeting of tax concessions and exemptions.

Proposal to limit income tax exemption from proceeds of insurance policies with very high value. Where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above Rs. 5 lakh, income from only those policies with aggregate premium up to Rs. 5 lakh shall be exempt.

Income of authorities, boards and commissions set up by statutes of the Union or State for the purpose of housing, development of cities, towns and villages, and regulating, or regulating and developing an activity or matter, proposed to be exempted from income tax.

Minimum threshold of Rs. 10,000/- for TDS to be removed and taxability relating to online gaming to be clarified. Proposal to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of the financial year.

Conversion of gold into electronic gold receipt and vice versa not to be treated as capital gain.

TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases.

Income from Market Linked Debentures to be taxed.

Deployment of about 100 Joint Commissioners for disposal of small appeals in order to reduce the pendency of appeals at Commissioner level.

Increased selectivity in taking up appeal cases for scrutiny of returns already received this year.

Period of tax benefits to funds relocating to IFSC, GIFT City extended till 31.03.2025.

Certain acts of omission of liquidators under section 276A of the Income Tax Act to be decriminalized with effect from 1st April, 2023.

Carry forward of losses on strategic disinvestment including that of IDBI Bank to be allowed. 

Agniveer Fund to be provided EEE status. The payment received from the Agniveer Corpus Fund by the Agniveers enrolled in Agnipath Scheme, 2022 proposed to be exempt from taxes. Deduction in the computation of total income is proposed to be allowed to the Agniveer on the contribution made by him or the Central Government to his Seva Nidhi account.

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

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New Delhi, 11^th January, 2023

PRESS RELEASE

Direct Tax Collections for F.Y. 2022-23 up to 10.01.2023

The provisional figures of Direct Tax collections up to 10^th January, 2023 continue to register steady growth. Direct Tax collections up to 10^th January, 2023 show that gross collections are at Rs. 14.71 lakh crore which is 24.58% higher than the gross collections for the corresponding period of last year. Direct Tax collection, net of refunds, stands at Rs. 12.31 lakh crore which is 19.55 % higher than the net collections for the corresponding period of last year. This collection is 86.68% of the total Budget Estimates of Direct Taxes for F.Y. 2022-23.

So far as the growth rate for Corporate Income Tax (CIT) and Personal Income Tax (PIT) in terms of gross revenue collections is concerned, the growth rate for CIT is 19.72% while that for PIT (including STT) is 30.46%. After adjustment of refunds, the net growth in CIT collections is 18.33% and that in PIT collections is 21.64% (PIT only)/ 20.97% (PIT including STT).

Refunds amounting to Rs.2.40 lakh crore have been issued during 1^st April, 2022 to 10^th January 2023, which are 58.74% higher than refunds issued during the same period in the preceding year.

(Surabhi Ahluwalia)

Pr. Commissioner of Income Tax

 (Media & Technical Policy)

Official Spokesperson, CBDT.

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 18^th December, 2022

PRESS RELEASE

Gross Direct Tax collections for the Financial Year (FY) 2022-23 register a growth of 25.90%

Net Direct Tax collections for the FY 2022-23have grown at over 19.81%

Advance Tax collections for the FY 2022-23 stand at Rs. 5,21,302 crore as on 17.12.2022 which shows a growth of 12.83%

Refunds aggregating to Rs. 2,27,896 crore have been issued in the current fiscal

The figures of Direct Tax collections for the Financial Year 2022-23, as on 17.12.2022 show that net collections are at Rs. 11,35,754 crore, compared to Rs. 9,47,959 crore in the corresponding period of the preceding Financial Year i.e FY 2021-22, representing an increase of 19.81%.

The Net Direct Tax collection of Rs. 11,35,754 crore (as on 17.12.2022) includes Corporation Tax (CIT) at Rs. 6,06,679 crore (net of refund) and Personal Income Tax (PIT) including Securities Transaction Tax(STT) at Rs. 5,26,477 crore (net of refund).

The Gross collection of Direct Taxes (before adjusting for refunds) for the FY 2022-23 stands at Rs. 13,63,649 crore compared to Rs. 10,83,150 crore in the corresponding period of the preceding financial year, registering a growth of 25.90% over collections of F.Y. 2021-22.

The Gross collection of Rs. 13,63,649 crore includes Corporation Tax (CIT) at Rs. 7,25,036 crore and Personal Income Tax (PIT) including Securities Transaction Tax(STT) at Rs. 6,35,920 crore. Minor head wise collection comprises Advance Tax of Rs. 5,21,302 crore; Tax Deducted at Source of Rs. 6,44,761 crore; Self-Assessment Tax of Rs. 1,40,105 crore; Regular Assessment Tax of Rs. 46,244 crore; and Tax under other minor heads of Rs. 11,237 crore.

The cumulative Advance Tax collections for the first, second and third quarter of the F.Y. 2022-23 stand at Rs. 5,21,302 crore as on 17.12.2022, against Advance Tax collections of Rs. 4,62,038 crore for the corresponding period of the immediately preceding Financial Year i.e. 2021-22, showing a growth of 12.83%. The Advance Tax collection of Rs. 5,21,302 crore as on 17.12.2022 includes Corporation Tax (CIT) at Rs. 3,97,364 crore and Personal Income Tax (PIT) at Rs. 1,23,936 crore.

There has been a remarkable increase in the speed of processing of income tax returns filed during the current fiscal, with almost 96.5% of the duly verified ITRs having been processed till 17.12.2022. This has resulted in faster issue of refunds with almost a 109% increase in the number of refunds issued in the current financial year. Refunds amounting to Rs. 2,27,896 crore have been issued in the FY 2022-23 till 17.12.2022, as against refunds of Rs.1,35,191 crore issued during the corresponding period in the preceding Financial Year 2021-22, showing a growth of over 68.57%.

(Surabhi Ahluwalia)

Pr. Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

                       

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 17^th November, 2022

PRESS RELEASE

Income Tax Department conducts search actions in Karnataka  

Income Tax Department initiated Search & Seizure actions on 20.10.2022 and 02.11.2022 on certain individuals who had executed Joint Development Agreements (JDAs) with various real-estate developers. The search action covered more than 50 premises spread across Bengaluru, Mumbai and Goa.

During the course of the search operations, a large number of incriminating evidences, in the form of documents and digital data have been found & seized. Evidences regarding the sale agreements, development agreements and occupancy certificates (OCs) have also been seized. These evidences revealed that the land owners had not disclosed income accrued to them from capital gains on transfer of the land given for development through JDAs to various developers, even after issue of the OCs from the authorities.

It was also unearthed that in many instances, the land owners suppressed income from capital gains for various years by artificially inflating the cost of acquisition & various other costs, and by not disclosing full value of consideration on transfer land. It was also found that some of the land owners didn’t even file their ITRs for various years, where capital gains income had accrued to them. When confronted , the assessees concerned  admitted  their lapses and agreed to disclose income from capital gains detected in their respective cases, and pay due taxes thereon.

So far, the search actions have led to detection of unaccounted income of more than Rs. 1300 crore. Further, undisclosed assets in the nature of cash and gold jewellery worth more than Rs. 24 crore have also been seized.

Further investigations are in progress.

 

(Surabhi Ahluwalia)

Pr. Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT