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These rules apply only to the new tax regime, except for the regulations on leave encashment limit and life insurance premiums.
The government has made the new income tax regime the default one starting April 1, 2023, although taxpayers can still avail of the old regime.
New income tax slabs were announced in 2023 Budget. Zero tax on income up to Rs 3 lakh; 5% on Rs 3-6 lakh; 10% on Rs 6-9 lakh; 15% on Rs 9-12 lakh; 20% on Rs 12-15 lakh, and 30% on income over Rs 15 lakh.
Individuals earning up to Rs 7 lakh per annum are not required to pay any taxes.
The standard deduction available in the old regime has also been extended to the new income tax regime.
The leave encashment amount claimed as exemption has been increased to Rs 25 lakh from Rs 3 lakh for non-government employees.
The maturity proceeds from life insurance policies after April 1, 2023, where the total annual premium exceeds Rs. 5 lakh will be taxable.
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