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New Income Tax Rules From April 1: Check Changes In Tax Slabs, Deduction, Rebates, and More

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New Income Tax Rules From April 1: As the financial year set to begin. The new tax regulations are set to be enforced starting April 1, 2024. These amendments, as outlined by Union Finance Minister, Nirmala Sitharaman in the budget 2023, entail modifications in income tax slabs, surcharge rates, rebates, and more. Here are the full details.

Note: New Tax Regime Is The Default Option

One of major change is the introduction of the new tax regime as the default option for taxpayers. Starting from the fiscal year 2023-24, taxpayers must choose between the old and new tax regimes, with the latter serving as the default option for FY 2023-24.

New Income Tax Slab Revisions

Under the new tax regime, revised income tax slabs will be applicable, categorized based on total income. These adjustments aim to streamline the taxation process for taxpayers. Here’s a breakdown:

Total IncomeIncome Tax Rate
Above Rs 15 Lakhs30 per cent
Between 12 Lakhs To 15 Lakhs20 per cent
Between 9 Lakhs To 12 Lakhs15 per cent
Between 6 lakhs To 9 lakhs10 per cent
Between 3 lakhs To 6 Lakhs5 per cent
Between 0 To 3 lakhs0 per cent

Advantages of the New Income Tax Regime

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

Simplified Tax Planning: The revised regime eliminates the need for complex tax planning strategies, providing taxpayers with a more straightforward approach to taxation.

Increased Exemption Limit: The basic exemption limit has been raised from Rs. 2.5 lakhs to Rs. 3 lakhs, enhancing the appeal of the new tax regime.

Reduced Surcharge Rate: The surcharge rate has been reduced from 37% to 25% for individuals with income exceeding Rs. 5 Crores.

Changes in Rebate and Deductions

Under the new tax regime, there have been alterations in rebate limits and deductions, including:

Increased Rebate Limit: The rebate limit has been raised to Rs. 25,000 for taxable incomes up to Rs. 7 lakhs.

Standard Deduction: Salaried individuals can avail a standard deduction of Rs. 50,000 under both the old and new tax regimes.

READ MORE: MP Student Gets IT Notice For Rs 46 Cr Transaction Done By Company Operating In Mumbai, Delhi

Changes In Tax Exemptions

In Budget 2023, a tax rebate was introduced for incomes up to Rs. 7 lakhs, implying no income tax liability for taxpayers within this bracket. Additionally, exemptions on leave encashment have been extended, providing relief for retirees.

Can Tax Payers Switch To Old Tax Regimes?

Taxpayers have the flexibility to switch between the old and new tax regimes based on their income type. However, professional or business income allows for a one-time switch, while other income types permit yearly transitions.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

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