New Delhi, Apr 1: The finance ministry has dismissed rumours circulating on social media that changes would be implemented to the new income tax regime starting April 1st. In a statement, the ministry clarified that no modifications are coming into effect for the 2024-25 fiscal year.
Introduced last year, the modified new income tax structure offers significantly lower tax rates compared to the previous system. However, taxpayers opting for the new slabs will not be eligible for various exemptions and deductions except the standard Rs. 50,000 exemption on salary and Rs. 15,000 on family pensions.
According to the ministry, the new regime serves as the default option but individuals have the flexibility to choose between old and new at the time of filing their Income Tax Returns (ITR) for Assessment Year 2024-25. Eligibility is based on whether one has business income or not.
Under the new tax regime, the first Rs. 3 lakh of income faces no tax. A 5% rate applies on earnings between Rs. 3-6 lakh, rising to 10% for Rs. 6-9 lakh. Incomes of Rs. 9-12 lakh and Rs. 12-15 lakh attract 15% and 20% tax respectively. Anything above Rs. 15 lakh is taxed at 30%.
In comparison, the previous system exempts the initial Rs. 2.5 lakh and levies 5%, 20% and 30% on successive income slabs up to Rs. 10 lakh. Taxpayers continue to benefit from existing exemptions and deductions under the old regime.
By clarifying no changes have been implemented, the finance ministry aims to curb the spread of misinformation regarding the income tax structure currently in place. Individuals now have certainty in planning their taxes for the new fiscal.
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