With the start of the new fiscal year (FY 2024-25), there will be some noteworthy changes to Bharat’s income tax regulations. These changes, will be implemented from April 1, 2024, aim to simplify tax planning and provide relief to taxpayers.
The government will implement the New Tax Regime as the default setting. This means that unless a taxpayer chooses to abide by the old tax structure, taxes will be automatically assessed and applied according to this new system.
In the last Budget (2022-23) speech, Union Finance Minister Nirmala Sitharaman had announced that while the new tax regime would be the default, taxpayers could opt for the old one.
Sitharaman had proposed to raise the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime. Therefore, if an individual has opted for the new tax regime, he or she will not be required to pay any tax up to an annual income of Rs 7 lakh.
The implementation of the new tax regime offers many benefits for taxpayers Taxpayers no longer need to maintain a track record of travel tickets and rent receipts.
The changes aim to simplify tax planning. The basic exemption limit has been elevated from ₹2.5 lakhs to ₹3 lakhs.
This makes the novel tax regime more appealing. The surcharge rate for individuals with income exceeding ₹5 Crores has decreased from 37% to 25%. This reduced surcharge rate applies only to those who choose the new tax regime.
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