As the new financial year (FY2024-25) begins on April 1, there will be changes to India’s income tax regulations. With the commencement of the new financial year, the changes proposed by the Union Budget will also come into effect applicable. The changes aim to simplify the process of tax planning while providing relief to the taxpayers. The Centre will implement the New Tax Regime as the default setting, which implies that unless individuals manually choose to abide by the old tax structure, taxes will be automatically assessed and applied according to this new system.
The tax slabs will be as follows
- Up to Rs 3 lakh – 0 per cent
- Rs 3 lakh to Rs 6 lakh – 5 per cent
- Rs 6 lakh to Rs 9 lakh – 10 per cent
- Rs 9 lakh to Rs 12 lakh – 15 per cent
- Rs 12 lakh to Rs 15 lakh – 20 per cent
- Above Rs 15 lakh – 30 per cent
A standard deduction of Rs 50,000, earlier available on the old tax regime has now been incorporated into the new regime. Thus, reducing the taxable income under the new regime. Taxpayers will no longer be required to maintain a track record of travel tickets and rent receipts. The basic exemption limit has been elevated from Rs 2.5 lakh to 3 lakh, thus making the novel tax regime more appealing to the public.
The surcharge rate for individuals with income of more than Rs 5 Crore has been decreased from 37 per cent to 25 per cent. Although, this will only be applicable under the new tax regime. Meanwhile, maturity proceeds from life insurance policies, which are issued on or after April 1, 2023 where the total premium exceeds ₹5 lakh, will be subject to taxation. The leave encashment tax exemption limit for non-government employees was ₹3 lakh but it has now been increased to ₹25 lakh.
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