What are the key highlights of budget 2023?

The latest budget includes lower tax rates under the new regime.

• As per the new tax regime, under section 87/A, an employee with a taxable income of less than Rs. 700,000/- is exempted from paying tax.
• In the new tax regime, the government has reduced the surcharge rate for the highest tax slab, i.e., Rs. 2 crore, from 37% to 25%.
• There was never a standard deduction for an employee before. The standard deduction of Rs. 50000/- is now applicable in the new as well as old regime for an employee.
• The current leave encashment exemption limit is revised from Rs. 3,00,000/- to Rs. 25,00,000/-.
• If an employee doesn’t choose a regime, the new regime will be the default regime.
• Previously, if someone earned Rs. 7,00,001, they had to pay Rs. 25,000 as tax. Even if they earned an additional Rs. 1, they still had to pay Rs. 25,000.
  But now, after the marginal relief amendment, from April 1, 2023, If someone earns Rs. 7,00,001, they only have to pay Rs. 1 as tax.
• The Marginal Relief is applicable for employees with taxable income ranges between Rs. 7,00,001 to Rs. 7,27,780.

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