As the new financial year commenced today, April 1, the Finance Ministry has issued a clarification about the new tax regime amid the ongoing misinformation on some of the social media platforms regarding the changes to India's new tax regimes in FY25.
The Ministry of Finance, in a post on social media platform X (formerly Twitter), stated, "It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that: There is no new change which is coming in from 01.04.2024. "
What are the Key points clarified by the Finance Ministry?
In the post on X, the Finance Ministry has come up with various points related to the new tax regime.
The Ministry of Finance, in a post on social media platform X clarified that "There is no new change which is coming in from 01.04.2024."
"The new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023, as compared to the existing old regime (without exemptions),"the Ministry said.
It also added that under the new tax regime, effective from 2023-2024 and its corresponding Assessment Year 2024-25, applies to individuals and entities excluding companies and firms.
"Under the new tax regime, the tax rates are significantly lower, though the benefit of various exemptions and deductions (other than standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension) is not available, as in the old regime," the Finance Ministry added in its post on platform X.
Although the new tax regime serves as the default option, the taxpayers have the flexibility to choose between the old and the new regimes based on what they think is beneficiary to them. Furthermore, the taxpayer can opt of the new tax regime that is available till the filling of the return for the Assessment Year 2024-25.
Moreover, eligible individuals without any business income have the option to choose either regime for each financial year, with an opportunity to switch between the new and old tax regimes as per their preferences.
New Regime 115BAC(1A) introduced for FY 2023-24
1. Income ranging from Rs 3 lakh to Rs 6 lakh will be taxed at 5 per cent.
2. Income between Rs 6 lakh to Rs 9 lakh will face a tax rate of 10 per cent.
3. Earnings from Rs 9 lakh to Rs 12 lakh will be taxed at 15 per cent.
4. Individuals with income between Rs 12 lakh to Rs 15 lakh will incur a tax rate of 20 per cent.
5. Income exceeding Rs 15 lakh will be taxed at 30 per cent.
