On Monday, the administration made it clear that there are no new income tax regulations going into force on april 1. The Ministry of Finance has released a comprehensive statement to refute false information on the new tax system on social media platforms. The announcement stated, "As a default regime from the financial year 2023–24, this regime is applicable for persons other than companies and firms, and the assessment year corresponding to this is AY 2024–25."
 
Although the tax rates are "much lower" under the new tax regime, it also said that, unlike under the previous tax system, there are no longer any standard deductions or exemptions available, save from the basic deduction of Rs 50,000 from salary and Rs 15,000 from family pension.
 
The statement from the finance ministry stated, "Taxpayers can choose the tax regime that they think is beneficial to them, even though the new tax regime is the default tax regime."
 
Please take notice that you have until the filing of your return for the 2024–2025 academic year to use your choice to opt out of the new tax system.
 
"For each fiscal year, eligible individuals who do not receive any revenue from their firm will have the choice of which regime to choose. Accordingly, they have the option to select the new tax system for one fiscal year and the old tax regime for another, and vice versa," the ministry continued.

New vs old income tax
People will have the choice to continue under the new regime or return to the previous one at the beginning of the next fiscal year.
 
Under sections like 80C (for investments and costs), 80D (for medical expenses), HRA (house rent allowance), and LTA (leave travel allowance), the previous system allowed for a plethora of deductions and exclusions. It does, however, have a more complex structure with larger tax slabs in some categories.
 
Conversely, the new system eliminates most deductions and exemptions and offers reduced tax rates. It simplifies the filing procedure, but it might not be appropriate for everyone.

One significant benefit of the new tax system is that anyone making up to Rs 7.5 lakh are not required to pay taxes. Furthermore, the system's lower tax slabs are available to people with incomes up to Rs 10 lakh who have no assets.
 
 
 
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Income Tax

G GOWTHAM

01/04/2024 11:40 AM