New Delhi: The Income Tax (I-T) department has set the tax filing deadline of July 31, 2024, which means that the tax filing process is underway for financial year 2023-24 and assessment year 2024-25. Since 2020, taxpayers have the option of filing their income tax under more than one tax regime — the old tax regime an the new tax regime. Both tax regimes offer different tax rates based in the income tax slabs.
What are income tax rates under new tax regime
Announced by the finance minister in the Union Budget of 2020, the new tax regime is the default tax regime for taxpayers starting from AY24-25. This means that taxpayers will have to choose their tax regime to old tax regime if they wish to submit investment proof for deductions.
Here is how the tax slabs are structured under the new tax regime:
No tax is levied on income of up to Rs 3 lakh
A 5 per cent tax rate is levied on income range above Rs 3 lakh up to Rs 6 lakh
A 10 per cent rate is applicable on an income of above Rs 6 lakh up to Rs 9 lakh
A 15 per cent tax rate is applicable on income of above Rs 9 lakh up to Rs 12 lakh.
A 20 per cent tax rate is applicable of incomes above Rs 12 lakh up to Rs 15 lakh then
A 30 per cent tax rate is applicable on incomes exceeding Rs 15 lakh
Tax Slabs As Per New Income Tax Regime
Total Income (Rs)
Income Tax Rate (%)
Up To Rs 3,00,000
NIL
Rs 3,00,001 – 6,00,000
5%
Rs 6,00,001 – 9,00,000
10%
Rs 9,00,001 -12,00,000
15%
Rs 12,00,001 – 15,00,000
20%
Above Rs 15,00,000
30%
While presenting Budget 2024, finance minister Nirmala Sitharaman announced that income up to Rs 7 lakh will not be taxable under the new tax regime. The new tax regime also allows a standard deduction of Rs 50,000, so overall tax-free income comes down to Rs 7,50,000.
The new tax regime does not allow any deduction under Section C of the Income Tax Act. This is aimed at simplifying the tax filing process for taxpayers, since they are not required to submit any paperwork.
Income tax rates under old tax regime
The old tax regime allows deductions under Section 80C of the Income Tax Act. This lets users reduce the taxable income by investing in government schemes such as PPF and NPS, purchasing insurance for self and dependents, or for building a home or buying a property. Under the old tax regime there is no income tax on income up to Rs 5 lakh based on a rebate of Rs 12,500 computed under Section 87A of the Income Tax Act.
Here are the tax slabs applicable under the old tax regime:
No tax on income up to Rs 2.5 lakh
A 5 per cent tax on income above Rs 2.5 lakh up to Rs 5 lakh
A 20 per cent tax rate on income above Rs 5 lakh up to Rs 10 lakh
A 30 per cent tax rate on income above Rs 10 lakh
Here are the tax Slabs as per Old Income Tax Regime:
Total Income (Rs)
Income Tax Rate (%)
Up To Rs 2,50,000
NIL
Rs 2,50,001- 5,00,000
5%
Rs 5,00,001- 10,00,000
20%
Above Rs 10,00,000
30%
In the new income tax regime, no tax is levied on income of up to Rs 3 lakh. While, when it comes to the old tax regime, you don’t have to pay any tax on income of up to Rs 2.5 lakh. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
