New Delhi: April 1, 2024, marks the beginning of a new financial year, bringing with it changes to income tax rules as announced by Finance Minister Nirmala Sitharaman during her Budget speech earlier this year in February. What are the changes that are taking place from the kick start of the new financial year?
This is the question that may be making rounds in your minds. If so, here’s a breakdown of the key changes taking effect from April 1, 2024. (Also Read: Mutual Fund Investors ALERT! One Needs To Do THIS By March 31 To Avoid Transaction Blocks)
New Tax Regime
From April 1, 2024, onwards, there will be a default adoption of the new tax regime. This move is aimed at simplifying the tax filing process and encouraging more individuals to opt for this regime. (Also Read: Agency Banks To Open This Sunday: Check What It Is, How They Operate & Full List)
However, taxpayers retain the option to stick to the old tax regime if it proves more beneficial for them.
Tax Slabs
Under the new tax regime, the tax slabs are mentioned below:
– If your income is from Rs 3 lakh to Rs 6 lakh, then you will be taxed at 5 percent.
– If anyone generates income from Rs 6 lakh to Rs 9 lakh in a particular financial year, they have to pay 10 percent tax.
– If your earnings are between Rs 9 lakh and Rs 12 lakh, you will be entitled to pay 15 percent tax.
– You will be entitled to pay 20 percent tax on the income from Rs 12 lakh to Rs 15 lakh.
– Income of Rs 15 lakh and above will be taxed at 30 percent.
Standard Deduction Under New Tax Regime
The standard deduction of Rs 50,000, previously applicable only to the old tax regime, has now been incorporated into the new tax regime. This adjustment will effectively reduce taxable income under the new regime.
Reduction In Surcharge Rate Under New Tax Regime
The highest rate of surcharge, previously at 37 percent on income above 5 crore, has now been reduced to 25 percent.
Taxation On Maturity Proceeds From Life Insurance Policies
From April 1, 2023, maturity proceeds from life insurance policies issued where the total premium exceeds Rs 5 lakh will be subject to taxation.
Increase In Leave Encashment Tax Exemption Limit
The tax exemption limit for leave encashment for non-government employees has been increased from Rs 3 lakh to Rs 25 lakh.