This year, the union budget presented in Feb 2023 brought several key changes to Indian tax slabs, surcharge, rebate, and more, that would affect your payroll processing. We are pleased to announce that greytHR now accommodates all of these changes laid out in Budget 2023. For you, this means a worry-free beginning to FY2023-24 this April.
All the below changes are updated on the greytHR application and available for your use without the need for any intervention from you.
Here are the key changes and greytHR’s response to them.
Key Changes from Budget 2023. . . and to greytHR!
The key changes this year have been made to the new regime. The old regime stands as it did prior to Budget 2023.
Changes to Income Tax Slabs Under the New Regime
Tax slabs under the new regime have undergone changes this time around. These revised tax slabs have duly been incorporated into greytHR, as shown below.
Surcharge for the Highest Slab in the New Regime Now Stands at 25%
Whereas the new regime previously featured a surcharge of 37% for those who fell into the highest tax slab (> 2 crores), this number has been brought down to 25% now - a change that is reflected in greytHR as well, as shown above. This would result in a reduction of the maximum tax rate to 39% from the previous 42.74%, which was among the highest in the world.
Standard Deduction of INR 50,000 Now Applies to the New Regime as Well
For salaried employees, while the old regime features a standard deduction of INR 50,000 to one’s taxable income, this provision has now been extended to the new regime as well. This change, too, has been implemented by greytHR into its payroll software, as shown below.
Leave Encashment Limit Now Revised to INR 25 lakhs
Since 2002, the tax exemption limit on leave encashment was INR 3 lakhs for non-government salaried employees. This limit has seen a big change in Budget 2023 and now stands at INR 25 lakhs. This change as well is captured in greytHR and can be viewed in the IT statement, as an exemption under Section 10.
Rebate for Taxable Income of up to INR 7 lakhs
Under the old regime, the tax rebate offered is applicable only up to a taxable income of INR 5 lakhs. Under the new regime, this number has been revised and stands at a taxable income of INR 7 lakhs. That is to say, under the new regime, no tax is applicable for taxpayers whose taxable income is equal to or less than INR 7 lakhs. This change has been incorporated into greytHR and will be taken into account during IT computation for your employees. The change can also be seen in the IT statement of employees.
New Regime Applicable By Default
greytHR has also refreshed the budget regime allocation feature in compliance with Budget 2023. Starting from the 2023-24 financial year, the new income tax regime will be the default option. Although employees can still choose between the two regimes during the IT declaration process, the new regime will be automatically applied if they do not submit a declaration or actively choose their tax regime. This update aims to simplify the tax process for employees and ensure compliance with the new directive.
Stay 100% Compliant, 100% of the Time with greytHR!
Budget changes can be overwhelming and time-consuming, but we're here to help you stay compliant. greytHR is now fully updated with the changes brought about by Budget 2023 to all components of income tax and other areas that will affect your payroll.
We remain committed to helping you stay 100% compliant, 100% of the time.
Here’s wishing you a successful new financial year ahead!
