Last Income Tax Slab and
The financial minister Nirmala Sitharaman has made Chages in the income tax slabs under the new tax regime in Budget 2024. The new income tax slabs under the new tax regime have retrospectively come into effect from 1st April 2024 for the current financial year 2014-25. The changes in income tax slabs of new tax regime were announced in July 2024 as government presented its full budget after the Lok Sabha elections 2024. Remember there were no. changes announced by the government in the interim budget announced in February 2024
Not all the tax slabs have been changed in the new tax regime. Only two tax slabs under the tax regime. Only two tax slabs under the new tax regime have been changed in the Budget 2024. The changes in the income tax slabs raise the upper limit in two slabs by Rs. 1 Lakh.
The current Rs. 3 Lakh - Rs. 6 Lakh slab has become Rs 3 lakh - Rs.7 lakh; and the Rs.6 lakh - Rs. 9 lakh slabs have become Rs. 7 -Rs 10 lakhs. This means people earning Rs 7 lakh would be taxed at 5% instead of 10 earlier; and those earning Rs. 10 lakhs would be taxed at 10% instead of 15% earlier.
This income tax slabs under the new tax regime are as follows: Rs. 0 - Rs. 3,00,000 - 0%, Rs 3,00,001 and Rs.7,00,000 - 5%, Rs 7,00,001and Rs 10,00,000-10%, Rs 10,00,001 and Rs. 12,00,000 and Rs. 15,00,000-20% and 15,00,001 and above - 30%
Apart from making Chages in the two-income tax slabs in the new tax regime, the finance minister has announced Chages in the standard deduction limit and employer's contribution to employee's NPS account available in the new tax regime. Even standard deduction available for family pensioners have been changed under the new tax regime. No. other changes, such as tax rebate available under the Section 87A, surcharge rate applicable for incomes exceeding Rs.50 lakh, have been made in the new tax regime.
The new tax regime continues to offer tax rebate of up to Rs. 25,000 for taxable incomes not exceeding Rs. 7 lakhs. Further, no Chage in surcharge for those earning more than Rs. 2 Crore.
The Chages have been made to make the new tax regime attractive. However, no changes have been made in the old tax regime. The income tax slab, rates and other income tax rules have not been changed under the old tax regime.
The old rules will continue to apply under the old tax regime. This means that higher deduction available under the new tax regime for standard deduction and employer's contribution will not be available in the old tax regime. Further, tax, rebate or Rs. 12,500 will continue to be available under the old tax regime if the taxable incomes do no exceed Rs. 5 lakhs. The main difference between the old and new tax regime is the availability of usual deductions and tax exemptions. The new tax regime does not allow deduction of common deductions such as Section 80C deduction up to Rs. 1.5 lakh for specified investments and expenditures, Section 80D deduction up to Rs. 25,000/Rs 50,000 for health insurance premium paid and Section 80TTA deduction of up to Rs 10,000 for interest earned from savings accounts of bank and post office, among others.
The income tax slabs applicable under the old tax regime depends on the age of individual.
The old tax regime offered multiple basic income exemption limits depending on the ae of the taxpayer. For individuals below 60 years of age, the basic income exemption limit is Rs 2.5 lakhs. For senior citizens aged 60 years and above but below 80 years, the basic exemption limit is Rs. 3 lakhs. For super senior citizens aged 80 years and above, the basic exemption limit is Rs. 5 lakhs.
Currently, the new tax regime is the default tax regime. An individual who wants to opt for the old tax regime now has to specifically choose it while filing income tax return. When new tax regime was introduced in FY 2020-21, it was an optional tax regime, they knew tax regime has lower tax rates as compared with the old tax regime. if individuals opt for the new tax regime, they can now claim only two deductions - Standard deduction of Rs, 50,000 from salary/pension income and Section 80CCD (2) for empolyer'scontribution to the employee's account.
Currently, a taxpayer having business income waiting to continue with the old tax regime in a financial year, will specifically have to opt for it. Once opted, they would have once in a lifetime option to switch to new tax regime. Once new tax regime is opted, they cannot opt for old tax regime again.
Income tax slabs for FY 2024 - 25 (AY 2025-26), FY 2023-24(AY 2024-25) under the new tax regime
The income tax slabs in the new tax regime have been tweaked for the current FY 2024-25(AY 2025-26). The changes in the income tax slabs raised the upper limit in two labs by Rs. 1 lakh. The Rs. 3 lakhs - Rs. 6 lakhs slab become Rs. 3 lakh - Rs. 7 lakhs; and the Rs. 6 lakh- Rs. 9 lakh slabs have become Rs. 7 lakh- Rs 10 lakh.
The changes in the new tax regime have been made to make it more attractive vis-a-vis old tax regime. In February 2023, the changes were announced in the new tax regime to make it more attractive for the individual taxpayers. Some of these changes were - introduction of standard deduction, rising basic exemption limit, hike in tax rebate under section 87A for taxable income up to Rs 7 lakh and so on.
Here are the new income tax slabs under new tax regime.
Income tax slabs under new tax regime for FY 2024-25
Income tax slabs (Rs) Income Tax rate (%)
From 0 to 3,00,000 0
From 3,00,001 to 7,00,000 5
From 7,00,001 to 10,00,000 10
From 10,00,001 to 12,00,000 15
From 12,00,001 to 15,00,000 20
From 15,00,001 and above 30
Changes made in the new tax regime in Budget 2024
Apart from tweaking income tax slabs, some changes were also made in the new tax regime. Changes announced in the new tax regime are as follows:
(a) new tax regime is the default tax regime. An individual has an option to opt for the old tax regime in any financial year, provided there is no business income
(b) Basic exemption limit of Rs 3 lakh for all individual taxpayers irrespective of their age
(c) Tax rebate under section 87A makes zero tax payable for taxable incomes up to Rs. 7 lakhs
(d) Highest surcharge rate for those earning above Rs 2 crore is 25%
Income tax slabs under new tax regime for FY 2023-24(AY 2024-25)
For those filing income tax return for previous financial year 2023-24, the income tax slabs under the new tax regime are different. Following are the income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) that will be used for ITR filing:
Income tax slabs (Rs) Income tax rate (%)
From 0 to 3,00,000 0
From 3,00,001 to 6,00,000 5
From 6,00,001 to 9,00,000 10
From 9,00,001 to 12,00,000 15
From 12,00,001 to 15,00,000 20
From 15,00,001 and above 30
Income tax slab rates for FY 2024-25 (AY 2025-26), FY 2023-24(AY2024-25), FY 2022-23(AY 2023-24), FY 2021-22 (AY 2022-23) under old tax regime
There are no Chages in the income tax slabs of the old tax regime in the July Budge 2024. Remember, income tax slabs under the new tax regime are tweaked. It will mean that anyone choosing the old tax regime for the current financial year 2024-25 (1st April 2024 and 31 March 2025) will calculate the income tax payable at the same rates as in FY 2023-24 (1st April 2023 and 31st March 2024).
Under the old tax regime, income tax slabs applicable to an individual depend on the age of an individual in a particular financial year. Hence, the basic exemption limit will also be different for individuals.
For an individual below 60 years of age, the basic exemption limit is or Rs 2.5 lakh. For senior citizens (aged 60 years and above but below 80 years) the basic income exemption limit is of Rs. 3 lakhs. For super senior citizens (aged 80 years and above), the basic income exemption limit is Rs. 5 lakhs. For non-resident individuals, the basic income exemption limit is of Rs. 2.5 lakh irrespective of age.
Given below are the income tax rates for FY 2024-25(AY2025-26), FY 2023-24 (AY 2024-25), FY 2022-23(AY 2023-24) and FY 2021-22 (AY 2022-23) under the old tax regime.
Income tax slabs for individuals under old tax regime
Income tax slabs (Rs) Income tax rate (%)
From 0 to 2,50,000 0
From 2,50,001 to 5,00,000 5
From 5,00,001 to 10,00,000 20
From 10,00,001 and above 30
Income tax slabs for senior citizens under old tax regime
Income tax slabs (Rs) Income tax rates (%)
From o to 5,00,000 0
From 5,00,001 to 10,00,000 20
From 10,00,001 to above 30
Comparison of income tax slabs under the old and new tax regime for FY 2024-25 (AY 2025-26)
Taxable income Old Tax Regime New Tax Regime
0 to Rs 2,50,000 0% 0%
Rs 2,50,001 to 3,00,000 5% 0%
Rs 3,00,001 to 5,00,000 5% 5%
Rs 5,00,001 to 7,00,000 20% 5%
Rs 7,00,001 to 10,00,000 20% 10%
Rs 10,00,001 to 12,00,000 30% 15%
Rs 12,00,001 to 15,00,000 30% 20%
Rs 15,00,001 and above 30% 30%
How to calculate income tax payable under new tax regime
For those salaried individuals who are continuing with the new tax regime for the current financial year, 2024-25
No comments:
Post a Comment