10 Lakhs Annual Income Can Be Tax Free: Annual income up to 10 lakh rupees can be tax free. Actually, the government is going to make the new tax system very easy. Many exemptions can be given in this. Taxpayers also demand that concessions should be given in this. Know how your income of 10 lakhs can be tax free:
Income Tax 2024: If your annual income is Rs 10 lakh and you do not want to pay income tax, your wish may be fulfilled. Actually, the government is considering giving many concessions in the new system of income tax. This includes increasing the limit of standard deduction to increasing the limit of exemption in slabs. It is believed that the government can announce it in the budget. If the government does this, then the new tax system can be a boon for those filing Income Tax Returns (ITR).
First know what concessions can be given in the new system
Standard Deduction: Currently, the standard deduction is Rs 50,000 under both the new and old systems. This is the first exemption that is deducted from the income while filing ITR. It is believed that the limit of standard deduction can be increased from Rs 50,000 to Rs 1 lakh this time.
Exemption in slab: Under the new system, there is no tax on income up to Rs 3 lakh. After this, 5% tax has to be paid on income from Rs 3 lakh to Rs 5 lakh. It is believed that the initial exemption limit of the tax slab can be increased from Rs 3 lakh to Rs 5 lakh. If this happens, then there will be no tax on income up to Rs 5 lakh.
Increase in exemption limit in NPS: People are hoping that this time in the budget, the exemption limit in NPS (National Pension Scheme) may increase. Till now, in the new system, exemption of Rs 50 thousand is available under 80CCD (1B). This can be increased to Rs one lakh.
🗓️ Check out the latest Income Tax Slabs for FY 2023-24 (AY 2024-25) for individuals!
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This way, income up to 10 lakhs will become tax free
If the government implements this concession in the new tax system, then the income of a person earning Rs 10 lakh annually will become tax free. It will be as follows:
- After deducting Rs 1 lakh as standard deduction from Rs 10 lakh, the taxable amount left will be Rs 9 lakh.
- If the exemption in NPS is Rs 1 lakh, then investing in it will give an additional exemption of Rs 1 lakh. In this way, the taxable income will be saved by Rs 8 lakh.
- Now by reducing the initial exemption of tax slab by Rs 5 lakh, the taxable income will be saved by Rs 3 lakh.
- 5% tax will have to be paid on this income of Rs 3 lakh which will amount to Rs 15 thousand. 4% health and education cess will be levied on this. This will be Rs 600. Thus the total tax liability will be Rs 15,600.
- Under the new tax system, Section 87A of Income Tax has given exemption on tax liability up to Rs 25,000. That is, even if the tax liability is Rs 15,600, no amount will have to be paid. In such a situation, the entire income of Rs 10 lakh will become tax free.
