New Delhi: Finance Minister Nirmala Sitharaman during the budget 2023-24 announced to increase the limit of tax exempt for taxpayers up to Rs 7 lakh under the new tax regime. This step brings a major relief for small taxpayers by giving them more money at disposition and providing relaxation from rebate procedure. But it puts a major problem for taxpayers who are just earning a little over the exempt ceiling.
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Giving a major relief to them, Finance Ministry announced to offer a marginal tax relief to small taxpayers under the new tax regime. This relief will be available from April 1, 2023 for the financial year of 2023-24.
A taxpayer would effectively pay nil if his/her income is up to Rs 7 lakh after getting Rs 25000 tax rebate. However, in case a taxpayer is earning slightly over Rs 7 lakh, suppose Rs 100, he would end up paying a tax of Rs 25,010. It seems like a sharp punishment for earning a little over amount. The Finance Ministry announced to offer a marginal tax relief for these small taxpayers whose income exceed over the exempt limit a little over.
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Hence, this marginal tax relief will probably benefit taxpayers whose taxable income is marginally above than the exempt ceiling.
