TFP Bureau, New Delhi; April 1, 2024: In response to misleading information circulating on certain social media platforms, the government has issued a clarification regarding the application of the new tax regime introduced under section 115BAC(1A) of the Finance Act 2023.
The updated tax regime, effective for the financial year 2023-24, provides revised tax brackets and rates compared to the existing old regime, without exemptions. Under the new regime, applicable to individuals other than companies and firms, tax rates are notably lower across income brackets, as outlined below:
While the new regime offers lower tax rates, it does not provide for various exemptions and deductions available in the old regime, except for the standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension.
Taxpayers retain the flexibility to choose the tax regime they deem most advantageous. The option to opt out of the new regime is available until the filing of returns for the assessment year 2024-25. Individuals without business income can select either regime for each financial year, allowing for alternating between the new and old tax structures.
The government reiterates that no new changes are slated to take effect from 1st April 2024, reaffirming the stability of the tax framework for the upcoming fiscal year.
