No changes in income tax regime; Finance Ministry slams social media news

Income tax regime

The Finance Ministry stated that there would be no additional changes to the income tax regime effective April 1, 2024, as reported by several social media outlets.

The ministry said that, “There is no new change which is coming in from 01.04.2024.”

The new tax regime under Section 115BAC(1A) was implemented in the Finance Act 2023, replacing the previous regime that did not include any exemptions. The new tax system is applicable to individuals other than businesses and firms as a default regime beginning with the Fiscal Year 2023-24, with the Assessment Year corresponding to this being AY 2024-25, according to the Finance Ministry.

The tax rates are much lower under the new regime. Still, several exemptions and deductions (other than the standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension) are no longer accessible, as they were under the previous regime, according to the Finance Ministry.

“New tax regime is the default tax regime. However, tax payers can choose the tax regime (old or new) that they think is beneficial to them… Option for opting out from the new tax regime is available till filing of return for the AY 2024-25,” the ministry added.

Eligible individuals with no company income will be able to choose the regime for each fiscal year. As a result, they can pick the new tax system in one fiscal year and the old tax regime in the next, or vice versa, according to a statement from the Finance Ministry.

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