New Delhi: In the recent interim budget announcement for the financial year 2024-25, Finance Minister Nirmala Sitharaman revealed that there would be no alterations to the existing income tax slabs. The interim budget maintained the status quo on income tax, with no adjustments made for the upcoming fiscal year.
Under the income tax laws, individuals without business income are required to choose between the new and old tax regimes annually. This flexibility allows individuals to opt for the new tax regime in one fiscal year and switch to the old tax regime the following year.
Significant changes were introduced in Budget 2023, affecting the new tax regime. The modifications to income tax slabs, as announced in Budget 2023, are applicable for the financial year spanning April 1, 2023, to March 31, 2024. Importantly, these changes will persist and remain unchanged for FY 2024-25, covering the period from April 1, 2024, to March 31, 2025.
The tax slabs for the new regime are as follows:
- No tax on income up to ₹3 lakh.
- 5% tax on income between ₹3-6 lakh, with a tax rebate under Section 87A available.
- 10% tax on income between ₹6-9 lakh, with a tax rebate under Section 87A available for income up to ₹7 lakh.
- 15% tax on income between ₹9-12 lakh.
- 20% tax on income between ₹12-15 lakh.
- 30% tax on income of ₹15 lakh and above.
In contrast, the tax slabs for the old regime are as follows:
- Income up to ₹2.5 lakh is exempt from taxation.
- Income between ₹2.5 to ₹5 lakh is taxed at a 5% rate.
- Personal income from ₹5 lakh to ₹10 lakh is taxed at a 20% rate.
- Income above ₹10 lakh is taxed at a 30% rate under the old regime.
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