Taxpayers earning just a little above the Rs 7 lakh income tax rebate limit in the new concessional regime could be in for a relief. The income tax authorities are understood to be looking at whether such taxpayers whose taxable income is just a tad over the Rs 7 lakh limit can also get the tax benefit.
According to sources, a marginal relief to such individual taxpayers could be in the works in the amendments to the Finance Bill, 2023 by proposing a small deduction so that they can also avail the income tax rebate and remain below the taxable limit.
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To make the concessional income tax regime more attractive, finance minister Nirmala Sitharaman had in the Union Budget 2023-24 proposed to increase the rebate limit to Rs 7 lakh in the new tax regime. People with income up to this amount would not have to pay tax.
Sources said it was felt that an exception may be made to ensure that more people can switch to the concessional regime if their income is on the borderline and higher by just a few 1,000 rupees.
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The government is hopeful that more taxpayers will opt for the concessional income tax regime on the back of the various sweeteners offered in the Union Budget. Apart from higher income tax rebate, the Budget has also proposed to reduce the number of slabs, increase the tax exemption limit to Rs 3 lakh and extend the benefit of standard deduction to those who opt for the new regime.
