As one enters the new financial year, here's a look at income tax changes at play

As per the revision, an individual with an annual income up to Rs 3 lakh will not have to pay any tax (as against an earlier limit of Rs 2.5 lakh). Further, it has put 5 percent tax for income between Rs 3 – 6 lakh, 10 percent for income between Rs 6-9 lakh, 15 percent for income between Rs 9-12 lakh, 20 percent for income between Rs 12 – 15 lakh and 30 percent above Rs 15 lakh.

The new slab, with changes, will also become default option.

Standard deduction for salaried employees will be a part of 'new tax slab' from April 1, 2023. Additionally, each salaried person with an income of Rs 15.5 lakh or more will stand to benefit by Rs 52,500 as standard deduction.

The surcharge will be lowered from 37 percent to 25 percent for those earning more than Rs 5 crore a year under the 'new income tax regime'. This means that, with effect from April 1, 2023, all income above Rs 2 crore would be subject to 25 percent surcharge. This also brings down the highest tax rate from 42.74 percent to 39 percent.

The tax deducted at source (TDS) on online gaming applications will be effective from April 1, 2023. TDS on winnings from online games will be deducted for every rupee earned, net of entry fees (if any).

The investment in mutual fund where not more than 35 percent is invested in equity shares of Indian company (which is debt funds) will be considered as short-term capital gains. This means long-term capital gains will go away.

Also, debt funds held for more than three years will no longer enjoy indexation benefits. Additionally, they won't be eligible for a 20 percent tax rate.

If premium paid by an individual for a savings life policy is more than Rs 5 lakh than on maturity the income from policy will be taxed. The threshold of Rs 5 lakh will be applicable on first year premium and not first year + renewal.

This will, however, not impact taxation of unit-linked insurance plans (ULIPs), term insurance and old policies, The income from insurance policies with aggregate premium up to Rs 5 lakh shall be exempt. This will not affect the tax exemption provided to the amount received on the death of person insured.

In case of withdrawals, where EPF account is not seeded with account holders' PAN card, TDS rate will come down to 20 percent from April 1, 2023 or from the beginning of FY24.

The limit of tax exemption on leave encashment on retirement of non-government salaried employees will be raised to Rs 25 lakh from April 1, 2023.

Converting physical gold to Electronic Gold Receipt and vice versa will not be considered a transfer and not attract any capital gains from April 1, 2023. This would promote investments in the electronic equivalent of gold.

From April 1, the government will impose a Rs 10 crore cap on the reinvestment of capital gains from the sale of housing property under the provisions of Sections 54 and 54F of the income tax act.

Section 54 lets a taxpayer claim benefits on selling a residential house and acquiring another from the sale proceeds. On the other hand, Section 54F offers tax on the long-term capital gains from the sale of any capital asset other than a house property.