The Finance Ministry has clarified that there are no new changes in the tax regime as of April 1, 2024. The interim budget’s income tax proposals are now in effect, and the new tax regime remains unchanged. Here are the key points from the ministry’s note:
- No New Change: There are no new alterations coming into effect from April 1, 2024.
- Existing Tax Regime: The new tax regime under section 115BAC (1A) was introduced in the Finance Act 2023. It offers lower tax rates but fewer exemptions and deductions compared to the old regime.
- Applicability: The new tax regime applies to individuals other than companies and firms. It is the default regime for the Financial Year 2023-24 and the Assessment Year 2024-25.
- Tax Rate Benefits: While the new regime has lower tax rates, it does not provide the benefit of various exemptions and deductions (except for standard deductions).
- Choice for Taxpayers: Taxpayers can choose between the old and new tax regimes based on what they find beneficial.
- Opt-Out Option: Taxpayers can opt out of the new tax regime until filing their return for AY 2024-25. Eligible individuals without business income can switch between regimes each financial year.
Remember, the income tax slabs remain unchanged for the new financial year (FY2024-25) according to the interim Budget.
