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Centre dismisses claims of altering new Income Tax regime effective April 1

Written by  Annesha Barua -- April 01st 2024 01:16 PM
Centre dismisses claims of altering new Income Tax regime effective April 1

Centre dismisses claims of altering new Income Tax regime effective April 1

PTC News Desk: Amid circulating reports suggesting changes in the new income tax regime commencing from April 1, 2024, the Ministry of Finance has refuted any modifications for the current fiscal year, affirming that individual taxpayers retain the option to opt out of the regime at the time of filing their Income Tax Returns (ITR).

Dispelling social media speculations regarding alterations in the new tax regime, the ministry clarified, "There is no new change which is coming in from 01.04.2024."

Introduced from the financial year starting April 1, 2023, a revamped income tax regime for individuals was implemented, offering significantly reduced tax rates. However, this new regime excludes various exemptions and deductions, with the exception of standard deductions such as Rs 50,000 from salary and Rs 15,000 from family pension.

"The new tax regime is the default tax regime. However, taxpayers can choose the tax regime (old or new) that they deem beneficial. The option for opting out from the new tax regime is available until filing of return for the Assessment Year (AY) 2024-25," stated the ministry.

Under the new income tax regime, income up to Rs 3 lakh is exempt from taxation. A 5 per cent tax is applicable to income ranging from Rs 3-6 lakh, followed by 10 per cent for income between Rs 6-9 lakh. Tax rates of 15 per cent, 20 per cent, and 30 per cent are imposed on income brackets of Rs 9-12 lakh, Rs 12-15 lakh, and above Rs 15 lakh, respectively.

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The new tax regime, established as the default framework from the fiscal year 2023-24, with the corresponding Assessment Year being 2024-25, can be altered by taxpayers during the filing of their ITR. Eligible individuals without business income possess the flexibility to select the regime for each financial year, enabling them to switch between the new and old tax regimes based on their preferences.

The existing tax regime, which remains effective and offers various deductions and exemptions, includes tax exemptions for income up to Rs 2.5 lakh, with a tax rate of 5 per cent for income between Rs 2.5-5 lakh, 20 per cent for income between Rs 5-10 lakh, and a 30 per cent tax rate for income exceeding Rs 10 lakh.

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(Inputs from agencies)



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