Employees Guide for Income Tax

Declaration Changes FY- 2023-24 | With

Budget Highlights
 Budget changes to Income Tax for FY- 2023-24

In the Budget 2020, the Government of India has introduced a personal income tax regime. This is
optional and you can choose to follow either the existing income tax regime or the new one.
Subsequently in the Budget 2023, the Government of India has made few significant changes in new tax
regime as detailed below:

 New Tax Regime is set to be made ‘Default’ Regime. Employee will have choose an option to
avail benefit of the Old Tax Regime. No changes have been proposed under Old Tax Regime.

 Rebate has been increased from 5 Lakhs to 7 Lakhs for assesses under New Tax Regime. Which
means, effectively there is no Income tax up to income of 7 Lakhs. Rebate up to 5 lakhs income
would continue under Old Tax Regime.

 Standard deduction of INR 50,000 is extended to New Tax regime, which was earlier available
only for Old Tax regime.

 Highest surcharge rate of 37 percent is reduced to 25 percent in New Tax Regime. This will result
in highest income tax rate of 39 percent under New Tax Regime, whereas old tax regime highest
tax slabs remains at 42.74%.

 Also there is change in the tax slab for New Tax regime which is provided in this mail
communication.

To help you make the right choice,

 The following table shows the tax rates of both the regimes.
Please study the information carefully and choose the right tax regime for you.

 Use the Dynamic Tax Calculator in the ESS portal to calculate the tax liability under the two
regimes.
 Income Tax Rates Income Tax Rates
Income Slabs (INR) (Including Surcharge & Cess) Income Slabs (INR) (Including Surcharge & Cess)
New Tax Regime Old Tax Regime
Up to 300,000 Nil Up to 250,000 Nil
300,001 –600,000 5.20% 250,001 –500,000 5.20%
600,001 –900,000 10.40% 500,001 –1,000,000 20.80%
900,001 –1,200,000 15.60% 1,000,001 –5,000,000 31.20%
1,200,001 –1,500,000 20.80% 5,000,001 –10,000,000 34.32%
1,500,000 –5,000,000 31.20% 10,000,001 –20,000,000 35.88%
5,000,001 –10,000,000 34.32% 20,000,001 –50,000,000 39.00%
10,000,001 –20,000,000 35.88% 50,000,001 and above 42.74%
20,000,001 and above 39.00%

List of exemptions/deductions and their applicability in both tax regimes

Existing Tax New Tax

Deduction Type
Regime Regime
Standard Deduction of Rs. 50000 Yes Yes
Professional Tax deducted from Salary Yes No

Exemptions under Section 10

House Rent Allowance Yes No
Children Education Allowance Yes No
Leave Travel Allowance Yes No
Uniform Allowance Yes No
Gratuity Yes Yes
Leave Encashment Yes Yes

Housing/Other Income
Other Income (Bank Interest, NSC Interest etc.) Yes Yes
Interest on Housing Loan - Self Occupied Yes No
Loss from House Property Income - Let Out Yes No
Income from House Property Income - Let Out Yes Yes
Interest on Housing Loan - Additional Exemption (80EE & 80EEA) Yes No

Chapter VI-A
Medical Insurance Premium (Sec 80D) Yes No
Deduction towards Handicapped Dependents (Sec 80DD) Yes No
Deduction towards treatment of Specified Diseases (Sec 80DDB) Yes No
Interest Paid on Higher Education Loan (Sec 80E) Yes No
Deduction for Permanent Disability (Sec 80U) Yes No
Interest on deposits in Saving bank accounts (80TTA) Yes No
Deduction in respect of Interest income (80TTB) for Senior Citizen Yes No
Exemption on Loan for Purchase of Electric Vehicles (80EEB) Yes No
Employer's contribution toward NPS (up to 10%)(u/s 80CCD) Yes Yes

Deductions Under 80C

Employees Provident Fund Yes No
Voluntary Provident Fund Yes No
Public Provident Fund Yes No
Children's Education - Tuition Fees Yes No
National Savings Certificate (NSC) Yes No
Life Insurance Premium Yes No
Housing Loan Principal Repayment Yes No
Sukanya Samriddhi Scheme Yes No
Accrued NSC Interest Yes No
Mutual Funds / ULIP Yes No
Deduction under Life Insurance Pension Scheme Yes No
Employees contribution towards NPS Yes No
Senior Citizens Savings Scheme Yes No
Tax Saver Fixed Deposits / Term Deposits / Senior Citizen Saving
Scheme Yes No
Investment in Infrastructure /tax saving bonds Yes No

The following table shows the impact of the flexible-benefit components on the two tax regimes.

Flexi Benefits Tax Free

Pay Components Existing Tax Regime New Tax Regime
House Rent Allowance Yes No
Leave Travel Allowance Yes No
Children Education / Hostel Allowance Yes No
Free Meal/ Food Coupon Yes No
Uniform Allowance/ Business Attire Yes No
Health Club/ Fitness Reimbursement Yes No
Professional Development/ Research Allowance Yes No
Books & Periodicals Yes No
Car Maintenance / Insurance/ Fuel Reimbursement
Yes No
( Own Car )
Users guide for Flexi and IT declaration – Darwinbox
After Selecting the IT Declaration page, we find the following details:
Once IT Declaration page is open for the employee, we can view the deadline for submission
and start our declaration.

In the beginning by default the Declaration page will be set to New Tax Regime. Follow the
following instructions as shared in the image below:
Post completion of Income tax declaration, click on “submit” to view it’s impact on the tax
sheet and compare tax tab.
Click on the Compare Tax, to view which tax regime would be better for the employee to opt
for. With respect to the following the employee can choose to change their tax regime and
resubmit or go with the current tax regime.

THANK YOU