People who make more than the taxable limit have to pay taxes on their income. At the moment, there are two different ways to pay income tax in the country. The New Tax Regime and the Old Tax Regime are two of these.
In both tax systems, there are different tax brackets that determine how much tax needs to be paid.
Report of income tax
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When Finance Minister Nirmala Sitharaman presented the Union Budget for 2023, she said that the income tax would be changed in several ways. The tax system also changed because of these changes.
Along with this, the tax brackets were changed as well. When the new tax system was announced, the Modi government kept zero tax on the first Rs 3 lakh.
After this, people with annual incomes between Rs 3–6 lakh will have to pay 5% tax. On the other hand, people who make between 6 and 9 lakh rupees will have to pay 10% income tax. If someone makes between Rs 9 and 12 lakh per year, they will have to pay 15% tax.
After this, people whose income is between 12 and 15 lakh rupees will have to pay a 20% tax. Aside from this, people with incomes over Rs 15 lakh will have to pay an extra 30% tax.
Old tax regime
On the other hand, under the old tax system, taxpayers under the age of 60 did not have to pay any tax on the first Rs 2.5 lakh they earned. After this, people with an annual income between Rs 2.5 lakh and Rs 5 lakh will have to pay 5% tax.
At the same time, people who make between Rs 5 lakh and Rs 10 lakh a year will have to pay 20% tax. On the other hand, people whose annual income is more than Rs 10 lakh will have to pay a tax rate of 30%.