In order to fix a mathematical error, the Finance Ministry has granted a marginal tax relief to low-income taxpayers under the new tax system whose income surpasses Rs. 7 lakh. Beginning on April 1, this assistance will be available for the fiscal year 2023–2024.
Individual taxpayers with taxable income up to Rs 7 lakh are eligible for a tax rebate of Rs 25,000 under the new tax regime’s new tax slabs. Their taxable income up to Rs. 7 lakh is therefore tax-free for them. Yet, if a taxpayer earns just one rupee more, or Rs. 700,100, he or she must pay Rs. 25,010 in taxes. In other words, a mere 100 rupees in increased revenue leads in a 25,010 rupee tax bill before cess. As a result, marginal assistance is now offered to ensure that the tax due does not exceed income that exceeds Rs. 7 lakh (which in this illustration is Rs. 100).
Taxpayers whose taxable income (after taking any allowable deductions) is between Rs. 7 lakh and Rs. 7.3 lakh are likely to benefit from this marginal tax cut.
