Budget 2023-24: Centre mulls increasing tax-free slab to Rs 5 lakh

Only 10-12% assessees opted for new regime introduced in 2020

Policymakers are examining the possibility of increasing the tax-free slab to Rs 5 lakh in the two-year-old alternative personal income tax regime to make it attractive, a government official said.

At present, taxpayers don’t pay income tax if their taxable income is Rs 2.5 lakh and below.

Increasing the threshold will reduce the tax outgo for assessees, thereby leaving more money with them to invest, the official said.

Currently, very few taxpayers have opted for the alternative tax regime. For many, the tax outgo in the older personal income-tax regime is lower if they make use of deductions such as