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Author's profile photo Jayanti Venkata Ramana

Budget Changes 2023-24 for Country India Payroll

Hello All

Budget changes for the tax year 2023-24 for Country India Payroll would contain as follows:-

Key changes related to Budget 2023 that affect payroll processing

In the Finance Bill, 2023 that was presented in the parliament to give effect to the financial proposals of the Central Government for the financial year 2023-2024, the following proposals that affect payroll processing are made

1. New Tax Regime to be considered as the default tax regime, while an option to choose Old Tax Regime should be made available. All the employees will now be under New tax Regime by default. If an employee chooses to move to Old Tax Regime, he/she needs to specifically opt for the same.

2. For New Tax Regime, the basic exemption limit will be enhanced from 2.5 Lakhs INR to 3 Lakhs INR. Below are the tax rates applicable for New Tax Regime:

    • Up to 3,00,000 INR: NIL
    • 3,00,000 to 6,00,000 INR: 5%
    • 6,00,000 to 900,000 INR: 10%
    • 9,00,000 to 12,00,000 INR: 15%
    • 12,00,000 to 1500,000 INR: 20%
    • Above 15,00,000 INR: 30%

3. Introduction of Standard Deduction of 50,000 INR in New Tax Regime. Employees opting for New Tax Regime will now get the benefit of Standard Deduction of 50,000 INR from salary.

4. Surcharge rate on income above 5 crores is reduced from 37% to 25% in New Tax Regime. Surcharge will now have different slabs for Old Tax Regime and New Tax Regime. The surcharge rates for Old Tax Regime remain the same.

5. Limit on Tax Rebate to be increased from 5 Lakhs INR to 7 Lakhs INR for New Tax Regime. Employees having income up to 7 Lakhs INR will now get the benefit of rebate u/s 87A in New Tax Regime.

6. The leave encashment exemption limit for non-goverment employees is increased from 3 Lakhs INR to 25 Lakhs INR. Employees under both Old Tax Regime and New Tax Regime will get this benefit.

7. Net winnings from online games are subjected to a withholding tax at a rate of 30%. Now the minimum threshold of 10,000 INR has been removed for tax imposed on winnings from online gaming.

Check out the details at:

https://launchpad.support.sap.com/#/legalchangenotification/NoteInforSet/jira=GSREQAPJ-3953X/MidColumnFullScreen/0

Important:-

Keep an eye on the following SAP note and KBA for more information :-

  1. SAP Note – 3298673 – FAQ on Budget 2023-2024

Customers who have not yet subscribed to the Newsletter, please do Subscribe to SAP Payroll India Newsletter Today !

For More Details: Refer KBA 2758160 – SAP HCM Payroll India Monthly Newsletter – Product Support

Thanks and Kind Regards

Ramana

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      4 Comments
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      Author's profile photo Jayanti Venkata Ramana
      Jayanti Venkata Ramana
      Blog Post Author

      Hello All

      Union Budget 2023 – 2024 changes are released via the below SAP Notes:

      1. 3309482 - Union Budget 2023-2024: Default Tax Regime to be the New Tax Regime
      2. 3300975 - Union Budget 2023-2024: Changes in Tax Slabs, Standard Deduction, Surcharge, Tax Rebate and LEA Exemption
      3. 3303946 - Union Budget 2023-2024: Minimum threshold of 10K to be removed for levying tax on net winnings from Online Gaming

      Please read each of the notes completely , and then apply the changes in your system !

      Thanks and Kind Regards

      Ramana

      Author's profile photo Devraj Chauhan
      Devraj Chauhan

      It doesn't say anything about Marginal relief.

      After Patch upgrade, In New tax regime system is not calculating Rebate under Section 87A.

      Please help, how to get this fixed?

       

      Author's profile photo Chetan Bajaj
      Chetan Bajaj

      Hello All,

      Kindly refer to SAP Note – 3298673 – FAQ on Budget 2023-2024

      to know the Minimum SP requirement for implementing the Budget Notes

      1. 3309482 - Union Budget 2023-2024: Default Tax Regime to be the New Tax Regime
      2. 3300975 - Union Budget 2023-2024: Changes in Tax Slabs, Standard Deduction, Surcharge, Tax Rebate and LEA Exemption
      3. 3303946 - Union Budget 2023-2024: Minimum threshold of 10K to be removed for levying tax on net winnings from Online Gaming

      Regards,

      Chetan

      Author's profile photo Chetan Bajaj
      Chetan Bajaj

      Hi All,

      You may refer to the KBA 3324593 - Payroll India Budget Notes 2023 - How To Implement

      Regards,

      Chetan