Amidst speculations, the Finance Ministry has clarified that there will probably be no new modifications within the tax regime from April 1, 2024, because the interim funds’s earnings tax proposals take impact. In an announcement posted on X (previously Twitter), the ministry addressed confusion surrounding the brand new tax regime, recognized for its decrease charges however fewer exemptions and deductions.
Interim funds highlights by Nirmala Sitharaman
Throughout the presentation of the interim funds on February 1, 2024, Union Finance Minister Nirmala Sitharaman assured that there could be no alterations to taxation, proposing to take care of present direct and oblique tax charges.
Key factors from Finance Ministry
- Responding to misinformation circulating on social media platforms, the Finance Ministry shared six necessary factors for the monetary yr relating to taxes:
- No new change: There will probably be no new change as of April 1, 2024.
- Introduction of latest tax regime: The brand new tax regime underneath Part 115BAC(1A) was launched within the Finance Act 2023, differing from the present outdated regime.
- Applicability: The brand new tax regime is relevant for people aside from corporations and corporations because the default regime from the Monetary 12 months 2023–24, with the corresponding Evaluation 12 months being AY 2024–25.
- Decrease tax charges: Whereas the brand new tax regime affords considerably decrease tax charges, it doesn’t present the good thing about numerous exemptions and deductions accessible within the outdated regime.
- Choice for taxpayers: Taxpayers can select between the outdated and new tax regimes based mostly on what they discover useful.
- Choose-out choice: Taxpayers have the choice to decide out of the brand new tax regime till submitting their returns for AY 2024–25. Eligible people with out enterprise earnings can choose the regime for every monetary yr as per their desire.
Interim funds tax slabs
As per the interim funds, the earnings tax slabs stay unchanged for the brand new monetary yr (FY2024–25). Earnings starting from Rs. zero to Rs. 3,00,000 will probably be exempt from tax, with subsequent slabs taxed at 5%, 10%, 15%, 20%, and 30%, respectively.
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