The Finance Ministry has debunked rumors related to the new tax regime, stating that there will be no changes in the tax structure from April 1. This clarification comes amidst misinformation spreading on social media platforms regarding the new tax regime.
What is the New Tax Regime?
The new tax regime, introduced under section 115BAC(1A) of the Finance Act 2023, was presented as an alternative to the existing tax system. It applies not only to companies and firms but also to other individuals. This new system is being implemented as the default option from the financial year 2023-24, with its evaluation period set for the financial year 2024-25.
Under the new tax regime, tax rates are relatively lower, and various exemptions and deductions available under the old regime are not applicable.
Key features of the new tax regime include
- It is a default system, and taxpayers can choose between the new and old regimes.
- The option to opt out of the new tax regime is available for filing returns for the assessment year 2024-25.
- Individuals without any business income will have the option to choose the regime for each financial year.
Income Tax Slabs under the New Tax Regime
- Up to ₹3 lakh: 0%
- ₹3 lakh – ₹6 lakh: 5%
- ₹6 lakh – ₹9 lakh: 10%
- ₹9 lakh – ₹12 lakh: 15%
- ₹12 lakh – ₹15 lakh: 20%
- Above ₹15 lakh: 30%
Income Tax Slabs under the Old Tax Regime
- Up to ₹2.5 lakh: 0%
- ₹2.5 lakh – ₹5 lakh: 5%
- ₹5 lakh – ₹10 lakh: 20%
- Above ₹10 lakh: 30%
These updates aim to provide clarity and ensure taxpayers are well-informed about the options available to them regarding the tax regime they prefer to opt for.