Finance Act 2023 Amends Section 87A where No Tax Liability for Incomes Up to Rs 7 Lakh

Tax Exemption Law Insider IN
Tax Exemption Law Insider IN

LI Network

Published on: January 17, 2024 at 10:00 IST

The Ministry of Finance has declared a significant breakthrough in personal income tax benefits, fulfilling promises outlined in the Finance Act, 2023.

The Ministry of Finance shared on X, “Benefits in Personal Income Tax! Vide Finance Act, 2023, Section 87A of the Income-tax Act, 1961 has been amended to allow a rebate to tax resulting in no tax liability to persons having income up to Rs. 7 lakh. (1/5) #PromisesDelivered.”

The amendment to Section 87A of the Income-tax Act, 1961, has been introduced to provide a rebate, ensuring no tax liability for individuals with incomes up to Rs. 7 lakh.

This development aligns with the government’s commitment to easing the tax burden on the middle-income segment.

The Central Board of Direct Taxes (CBDT) has effectively delivered on budget promises for the fiscal year 2023-24, with a specific focus on personal income tax relief.

The Finance Act of 2023 outlined key changes, including the amendment to Section 87A, directly impacting the tax liability of individuals.

In the announcement, it was highlighted that the existing provision exempts those with income up to Rs. 5 lakh from paying income tax in both the old and new tax regimes.

However, as part of the Finance Act, 2023, the rebate limit has been increased to Rs. 7 lakh for individuals in the new tax regime.

This means that individuals falling within this income bracket under the new tax regime will now be exempt from paying any income tax.

The move aims to provide relief to a broader segment of taxpayers and stimulate economic growth by increasing disposable income.

The announcement further emphasized the government’s commitment to delivering promises and ensuring citizens receive tangible benefits from the proposed changes.

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