New Tax Regime: What You Need to Know For FY 2024-25
The Finance Ministry recently clarified that there won't be any new changes in the tax regime starting April 1, 2024. This is in line with what was announced by Finance Minister Nirmala Sitharaman during the interim budget presentation on February 1, 2024. She had mentioned that the tax rates would remain the same, both direct and indirect.
The Ministry's post on X (formerly Twitter) addressed some confusion surrounding the new tax regime, which has lower rates but fewer exemptions and deductions compared to the old regime.
— Ministry of Finance 🇮🇳 (@FinMinIndia) April 1, 2024It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that:
— Ministry of Finance (@FinMinIndia) March 31, 2024
👉 There is no new change which is coming in from 01.04.2024.
👉 The new tax regime under section 115BAC(1A) was… pic.twitter.com/DtKGkK0D5H
Here are the key points they highlighted for the financial year:
1. No new changes are coming into effect from April 1, 2024.
2. The new tax regime introduced under Section 115BAC(1A) was part of the Finance Act 2023, replacing the old regime without exemptions.
3. This new regime applies to individuals other than companies and firms as the default from the Financial Year 2023-24, with the corresponding Assessment Year being 2024-25.
4. Under the new regime, tax rates are significantly lower, but many exemptions and deductions (except for standard deductions of Rs. 50,000 from salary and Rs. 15,000 from family pension) are not applicable as they were in the old regime.
5. Taxpayers can choose between the old and new tax regimes based on what benefits them.
6. The option to opt out of the new tax regime is available until filing the return for Assessment Year 2024-25. Eligible individuals without business income can choose the regime each financial year, alternating between the new and old tax regimes as they see fit.
For the current financial year (FY2024—25), the income tax slabs remain the same as in the interim Budget announcement:
- Income from ₹0 to ₹3,00,000 is exempt from tax.
- Income from ₹3,00,001 to ₹6,00,000 is taxed at 5%.
- Income from ₹6,00,001 to ₹9,00,000 is taxed at 10%.
- Income from ₹9,00,001 to ₹12,00,000 is taxed at 15%.
- Income from ₹12,00,001 to ₹15,00,000 is taxed at 20%.
- Income of ₹15,00,000 and above is taxed at 30%.
Click for more updates and the latest business news, along with Web stories updates. Also, get the latest news and top headlines from India and around the world at Speed News
