
Income Tax 2024: With just five days left for the ITR filing deadline, many taxpayers find themselves grappling with the implications of the latest revisions in tax slabs under the New Tax Regime would affect their income tax liabilities this year.
The updated tax slabs under the New Tax Regime, modified rates of tax on capital gains, increased standard deduction, and securities transaction tax (STT) rate introduced by Finance Minister Nirmala Sitharaman in Budget 2024 have stirred considerable uncertainty among taxpayers as they prepare to file their income tax returns before the July 31 deadline.
It is to be noted that though the tax rates are applicable from July 23, 2024, the taxes would be calculated in the tax return to be filed in July 2025. Therefore, these alterations will undoubtedly play a significant role in determining your income tax liability when you submit income proofs next July.
The capital gains tax rates have been implemented on July 23, 2024, when the Union Budget 2024 was presented in Parliament earlier this week. This change implies that gains from asset sales following July 23 onwards will be subject to taxation based on the rates outlined in Budget 2024.
Which tax slabs will be applicable for July 31, 2024?
To file the income tax returns this month, which is for the FY24, the older tax slabs under the New Tax Regime will be applicable. These are the tax slabs:
Tax Slab for FY 2023-24 Tax Rate (Budget 2023)
Upto Rs 3 lakh: Nil
Rs 3 lakh - Rs 6 lakh: 5%
Rs 6 lakh - Rs 9 lakh: 10%
Rs 7 lakh - Rs 10 lakh: 10%
Rs 9 lakh - Rs 12 lakh: 15%
Rs 12 lakh - Rs 15 lakh: 20%
More than Rs 15 lakh: 30%
Currently, taxpayers have the option to choose between two tax regimes. The first one, known as the old tax regime, offers a wide array of deductions and exemptions. The second option is the new tax regime, featuring a lower tax rate but with fewer deductions and exemptions, except for the standard deduction. The main highlight of the new regime is its reduced tax rate compared to the old regime, which still retains its variety of deductions and exemptions.
In the Union Budget 2023, the threshold under the new regime was raised from Rs 5 lakh to Rs 7 lakh, accompanied by an increase in the basic exemption limit and adjustments to tax slabs and rates. While the new regime is more straightforward with fewer compliance requirements, the old regime remains advantageous for individuals claiming multiple deductions, particularly for expenses such as home loan interest under Section 24(b) or house rent allowance (HRA).
INCOME TAX SLAB (IN RS) OLD TAX REGIME NEW TAX REGIME
0-Rs 2.50 lakh 0% 0%
Rs 2,50,001-Rs 3,00,000 5% 0%
Rs 3,00,001-Rs 5,00,000 5% 5%
Rs 500,001-Rs 6,00,000 20% 5%
Rs 6,00,001-9,00,000 20% 10%
Rs 9,00,001-10,00,000 20% 15%
Rs 10,00,001-12,00,000 30% 15%
Rs 12,00,000-15,00,000 30% 20%
Rs 15,00,0001 & Above 30% 30%