Finance Bill, 2023--Tax Regimes

Old Regime v. New Regime

Srivatsan Ranganathan

The author has dealt the changes in the new tax regime as per the Finance Bill, 2023 in this Article.

section 115BAC was introduced vide Finance act, 2020 w.e.f. 01-4-2021 as an optional scheme of taxation without any deductions/rebates and allowances. For starters, individuals with income from business or profession opting in Section 115BAC is one way traffic and once an individual opts out re-entering will never be possible. For other individuals (not having income from business or profession) option to choose Section 115BAC and normal scheme of taxation (old regime) is a year on year see-saw/yo-yo to their convenience. How long can the new regime vs old regime switch over option remains open also needs to be seen in the coming days. The old regime grants various deductions and rebates/set off benefits which are generally not available under the new regime to recap.

(a) Changes made on the slab rates of Section 115BAC by Finance Bill, 2023 can be understood from the below tabulation.