income taxImage Credit source: Representational Image
Prime Minister Narendra Modi’s government is about to complete 9 years. During this time there were changes in many types of policies abroad. At the same time, many decisions were also taken for the general public. On the tax front too, in these 9 years, not one or two but 28 changes were made. The direct effect of these changes was also seen on the lives of common people.
When the country’s first Union Budget was presented after the Modi government came to power in 2014, the personal income tax exemption limit was increased from Rs 2 lakh to Rs 2.5 lakh. The exemption limit for senior citizens has been increased from Rs 2.5 lakh to Rs 3 lakh. The tax exemption limit under Section 80C has been increased from Rs 1 lakh to Rs 1.5 lakh, while the deduction limit for interest on home loan has been increased from Rs 1.5 lakh to Rs 2 lakh.
These major changes in income tax rules
- The limit of deduction on health insurance premium for the general public has been increased from Rs 15,000 to Rs 25,000.
- The deduction limit on health insurance premium for senior citizens has been increased from Rs 20,000 to Rs 30,000.
- The transportation allowance exemption has also been increased from Rs 800 to Rs 1,600 per month.
- An additional deduction of Rs 50,000 was allowed for contribution under National Pension Scheme (NPS) under section 80CCD.
- Overload increased from 10% to 12% on income above Rs 1 crore.
- Under Section 87A, the tax exemption was increased from Rs 2,000 to Rs 5,000 for people with an annual income of less than Rs 5 lakh.
- The limit for deduction on rent paid under section 80GG was also increased from Rs 24,000 per annum to Rs 60,000 per annum.
- Surcharge on income above Rs 1 crore increased from 12% to 15%.
- The budget also imposed 10% income tax on dividends exceeding Rs 10 lakh annually.
- Tax rate reduced from 10% to 5% in the 2.5 lakh – 5 lakh bracket.
- The Finance Minister reduced the tax exemption from Rs 5,000 to Rs 2,500 under Section 87A, which is applicable to taxpayers whose annual income is up to Rs 3.5 lakh.
- A surcharge of 10% was imposed on those with annual taxable income between Rs 50 lakh and Rs 1 crore.
- Standard deduction of Rs 40,000 in lieu of existing exemption on travel allowance and miscellaneous medical expenses
- Deduction for medical expenses increased from Rs.30,000 to Rs.50,000 for senior citizens.
- Deduction for income from interest on deposits with banks and post offices increased from Rs 10,000 to Rs 50,000 in the case of senior citizens. Also exempted from tax deduction for interest income up to Rs 50,000.
- In an election year, the interim budget brought good news for the middle class. Those earning less than Rs 5 lakh had to pay zero tax.
- The standard deduction for the salaried class was also increased from Rs 40,000 to Rs 50,000.
- The government introduced new tax slabs. The new tax regime was optional and taxpayers were given the option of staying in the old tax regime with exemptions and deductions or opting for the new lower tax rate without those exemptions.
- New tax slabs were announced in Budget 2020. Taxpayers were given the option of staying in the old regime with exemptions and deductions or opting for the new lower tax rate without those exemptions.
- Income tax was completely abolished on income up to Rs 5 lakh.
- If the employer’s contribution towards NPS, superannuation fund and EPF exceeds Rs 7.5 lakh in a year, it will be taxable for the employee.
- Pre-filed Income Tax Return (ITR) forms, maximum Tax Deducted at Source (TDS) for non-filers of Income Tax Returns and exemption of dividend payments to REITs/InvITs from TDS etc.
- There was no change in personal income tax slabs or rates. The government has given one more chance to rectify the mistakes in the filed Income Tax Return (ITR). The Finance Minister announced the new tax.
- Rules for taxpayers where a taxpayer can file an updated return on payment of taxes within two years from the end of the assessment year.
- Tax deduction limit for contribution to NPS of state government employees increased from 10% to 14%.
- In this year 2023, there were many changes in the income tax rules with effect from 1 April 2023. Change in tax exemption limit across income tax slabs, no LTCG tax exemption on certain debt mutual funds are some of the major changes with effect from April 1, 2023.
- Under the new income tax regime, the exemption applicable to individuals with an annual income of up to Rs 7 lakh has been extended.
- Standard deduction of Rs 50,000 was also introduced under the new income tax slab.
Read this also – Invest 5000 every month in SIP. This is how a fund of 2 crores will be made, this is the method of investment