Changes in Tax Rates Budget 2023 Applicable for FY 2023-24:-

• In the alternate tax regime under Section 115BAC(1A), the basic exemption limit shall be INR 3,00,000 and for every additional INR 3,00,000 of income, the next slab rate will be applicable. The highest slab rate of 30% shall continue to apply to income above INR 15,00,000.

• The alternate tax regime of Section 115BAC shall also apply to Association of Persons (AOP)[(other than a co-operative society], Body of Individuals (BOI), and Artificial Juridical Persons (AJP).

• Under the new tax regime, the highest surcharge rate of 37% on income above INR 5,00,00,000 has been reduced to 25%.

 • The threshold limit for total income eligible for rebate under Section 87A has been increased from INR 5,00,000 to INR 7,00,000 for assessees opting for the new tax regime.

• Standard deduction from salary income and deduction from family pension is extended to employees who opt for New Tax Regime.

• The new tax regime under Section 115BAC is the default tax regime.

• Marginal rebate under section 87A shall be allowed in the new tax regime under Section 115BAC(1A) where total income marginally exceeds INR 7,00,000.

• Tax rate under Section 115A has been reduced from 20% to 10% on the dividend income received by a non-resident or a foreign company from a unit in an IFSC as referred to in section 80LA(1A).

• Tax rate on royalty income and fees for technical services has been increased from 10% to 20%.

• A new section 115BAE has been inserted to provide a reduced tax rate of 15% (plus surcharge of 10% and cess) to manufacturing co-operative societies established on or after April 1st, 2023, and commencing production on or before March 31st, 2024 [provided that specified incentives or deductions are not availed].

• Section 115BBJ has been inserted to levy the tax at the rate of 30% on any winning from online gaming. A consequential amendment has been made to Section 115BB to exclude winning from online games from its scope.

• Consequential amendments have been made to Section 115JC and Section 115JD to provide an exemption from the provisions of AMT on opting for the new tax scheme of Section 115BAE or Section 115BAC(1A).

• A consequential amendment has been made to Section 92BA to give a reference to the new tax scheme of Section 115BAE.

No surcharge and health and education cess shall be levied on the tax calculated on income from securities held by the specified fund referred to in Section 10(4D).