New income tax rules announced by Finance Minister Nirmala Sitharaman will be effective from April 1, 2024 for FY 2024-25.
The new tax regime with lower rates and fewer deductions will be default, though taxpayers can opt for the old regime if advantageous.
The basic exemption limit is now ₹3 lakh, with the rebate rising from ₹5 lakh to ₹7 lakh under Section 87A of the Income Tax Act, 1961.
– The income tax slabs as per the new tax regime are as follows: 1. Income from ₹0 to ₹3,00,000: 0% tax rate 2. Income from ₹3,00,001 to ₹6,00,000: 5% 3. Income from ₹6,00,001 to ₹9,00,000: 10% 4. Income from ₹9,00,001 to ₹12,00,000: 15% 5. Income from ₹12,00,001 to ₹15,00,001: 20% 6. Income above ₹15,00,000: 30%
Taxpayers earning up to ₹7 lakh (or ₹7.5 lakh for salaried individuals with a ₹50,000 standard deduction) get a full rebate, reducing their taxable income to zero.
The government decreased the surcharge rate from 37% to 25% for high-income individuals.
Tax exemption limit for leave encashment now ₹25 lakh for non-govt. employees, up from ₹3 lakh.