April 1, 2024: No new changes related to income tax are coming into force from April 1, the finance ministry said in a statement issued on March 31. The announcement by the ministry is in response to some misleading social media posts.
“It has come to notice that misleading information related to new tax regime is being spread on some social media platforms,” the ministry said in its statement.
Offering clarification about applicability of the new tax regime, the ministry said that the regime was applicable for persons other than companies and firms as a default regime from the financial year 2023-24 (assessment year 2024-25 of AY2024-25).
Although, the new tax regime is the default tax regime, taxpayers can choose the tax regime that they think is beneficial to them, it added. 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.
Old versus new tax regime
| New regime 115BAC (1A) introduced for FY 2023-24 | Existing old regime | ||
| Rs 0-3 lakh | 0% | Rs 0-2.5 lakh | 0% |
| Rs 3-6 lakh | 5% | Rs 2.5 -5 lakh | 5% |
| Rs 6-9 lakh | 10% | Rs 5-10 lakh | 20% |
| Rs 9-12 lakh | 15% | Above Rs 10 lakh | 30% |
| 12-15 lakh | 20% | – | – |
| Above 15 lakh | 30% | – | – |
The 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 the new tax regime in one financial year and old tax regime in another year and vice versa.
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