Tax Changes for the New Financial Year 2023-24
At the beginning of every financial year (or) while joining the company you have to submit ‘Income Tax Declaration’ to the employer. This is a provisional statement that has details about your proposed investments and expenses that are Income Tax deductible. As the financial year end, in the month of January'2024 or at the time Separation, you need to provide supporting Investment proofs for these investments that you have specified in Income Tax Declaration. Based on your proposed investments and expenses, your employer deducts Income Tax from your monthly salary and deposits it to the government account.
You can submit your investment declaration through LSS online portal for Current Financial year (April 2023 to March 2024). These can be inputted through the “Tax Declarations” tab on your LSS dashboard. Do ensure that if you want to update your Investment Declaration (Online), then it must be done before 23rd April 2023 in order to get the same considered for tax calculation in April month's salary. If this is not done then your excess tax will get deducted from your monthly salary.
To know which all Exemptions and Deduction will be considered as per Old and New tax regime and its guideline, please refer below link
How to submit Investment declaration online with LSS portal
Step 1: Login to your LSS Employee account
Step 2: Go to “Tax Declarations”
Step 3: Click on “Investment submission”
Step 4: Next Click on Action button and then select “New Declaration” to submit online Investment declaration.
Step 5: For more detail on which all deduction and exemption will be applicable, click on “Investment Guideline” available on same page
Effective 1st April 2023, as per the new income tax rule, the default regime will be NEW for all employees. Hence we have kept all the employees under the New regime. Those who wish to opt for “Old Tax Regime” will now have to select the option “Old Regime” to get tax benefit under old tax regime, or else your income tax will be deducted based on “New tax Regime”. You can use the Tax Calculator to choose the best regime for your Income tax Calculation.
The option to manage the "Tax regime" is available in “Investment Submission” page. Click on "Click here to update" to change the regime.
Points to consider while submitting investment declaration online;
- You will get the declaration form with different sections in different tabs (for example Investment under 80C, Investments under 80 others, Rent Information, etc.)
- Go to the appropriate tab and enter the required details (Exemption category, amount, Rent Information, Loan information, etc.)
- To add more exemptions in the same batch, click on the “+Add More” button.
- To move to next tax, click on “Proceed” button
- To submit the Investment declaration, on last tab “Hosing Loan Info” click on “Submit All Details”
Union Budget 2023’s Key Highlights: How does it impact the Salaried Class?
1. Income Tax Rebate limit change for New Tax Regime
Finance Minister announced an increase in the Income Tax Rebate limit from Rs.5 lakh to Rs.7 lakh under the new tax regime. Currently those with an income of Rs.5 lakh do not pay any income tax, now effective financial year 2023-24 onwards those with an income of Rs.7 lakh will not require to pay any income tax who had opted for new tax regime, but those who had opted for old regime their limit will remain 5 lakh.
2. Change in Income Tax Slab rates for New Tax Regime
The Income tax slab for New Tax Regime is now changed effective new financial year 2023-24
Taxable Income Slab (Rs.) |
New Tax Rates (Rs.) |
| Upto 3 lakhs | NIL |
| 3 Lakh to 6 Lakh | 5% |
| 6 Lakh to 9 Lakh | 10% |
| 9 Lakh to 12 Lakh | 15% |
| 12 Lakh to 15 Lakh | 20% |
| 15 Lakh above | 30% |
3. New Tax Regime to be default tax regime
Earlier employee at the beginning of every financial year used to opt for New Tax Regime if he wants, but effective new financial year 2023-24 the default tax regime will be New Tax Regime instead of Old Tax Regime. So from April 2023 onwards if employee want to go with Old Tax Regime, then he should exercise this option himself by submitting declaration or via ESS payroll application provided by employer, or else his tax will get calculate based on New Tax Regime.
4. Highest surcharge reduce for new tax regime
The highest surcharge limit which was 37% is now reduce to 25%, and this option is available only to those employee who choose New Tax Regime.
5. Leave exemption limit increased
The leave exemption limit is now increased from Rs.3 lakh to Rs.25 lakh.
6. Standard Deduction limit extended to new tax regime
Earlier the standard deduction limit of Rs.50,000/- was available for those who opt for Old Tax Regime. Now the benefit is extend to new tax regime.
Points to consider while submitting Rent Proof at end of financial year;
For getting benefit under HRA Exemption employee need to provide proper supporting as listed below at ;
- Monthly rent receipts with revenue stamp affixed.
- Copy of leave and license agreement, this agreement should be notarised or registered. Ensure to submit the agreement for a financial year. If the agreement period if for 11 month say from July’2020 to May’2021, then employee will get HRA exemption benefit from April’2021 to May’2021 period. For getting HRA exemption tax benefit from June’2021 to March’2022, employee needs to submit the rent agreement for the said period too.
- Those paying rent amount more than Rs.8,333/- pm or Rs 1 lakh annually, need to furnish a copy of their landlord’s permanent account number (PAN), along with the rent receipts and agreement copy. Else If not provided, will not be eligible for HRA exemption.
- For paying rent over and above Rs.50,000 per month, Form 26QC is mandatory to provide as tax deducting proof. If this is not submitted the rent proof submitted will not be considered.
Run through the video guide at https://youtu.be/CcDNDEhxGVY
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