Income Tax rules applicable from April 1, 2024

# New tax regime is applicable for persons other than companies and firms, is applicable as a default regime from the Financial Year 2023-24 and the Assessment Year corresponding to this is AY 2024-25.

# Under the new tax regime, the tax rates are significantly lower, though the benefit of various exemptions and deductions (other than standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension) is not available, as in the old regime.

# New tax regime is the default tax regime, however, tax payers can choose the tax regime (old or new) that they think is beneficial to them.

# Option for opting out from the new tax regime is available till filing of return for the AY 2024-25. Eligible persons without any business income will have the option to choose the regime for each financial year. So, they can choose new tax regime in one financial year and old tax regime in another year and vice versa.

Advantages of the New Tax Regime:

The implementation of the new tax regime offers several benefits for taxpayers:

Simplified Tax Planning:

• Taxpayers no longer need to maintain a track record of travel tickets and rent receipts.
• The changes aim to simplify tax planning.

Increased Basic Exemption Limit:

• The basic exemption limit has been elevated from ₹2.5 lakhs to ₹3 lakhs.
• This makes the novel tax regime more appealing.

Surcharge Rate Reduction:

• The surcharge rate for individuals with income exceeding ₹5 Crores has decreased from 37% to 25%.
• This reduced surcharge rate applies only to those who choose the new tax regime.

Rebate Limit Enhancement:

• Under the new tax regime, the rebate limit has increased.
  For incomes up to ₹7 lakhs, the applicable rebate limit is now ₹25,000.

Unchanged Income Tax slabs

Union Finance Minister Nirmala Sitharaman, while presenting the interim Budget on February 1, 2024, said that there would be no changes to taxation and proposed to retain the same direct and indirect tax rates, including import duties. The Union Finance Minister further stated that the average time for refunds has been reduced from 93 days in 2013-2014 to just 10 days in the last year. She added that the average real income of people has increased by 50%.

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