Until FY 2019-20 (ending on March 31, 2020), there existed a single tax regime featuring four tax slabs and rates. The new tax regime was implemented in 2020. 
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Until FY 2019-20 (ending on March 31, 2020), there existed a single tax regime featuring four tax slabs and rates. The new tax regime was implemented in 2020. The Income Tax filing deadline is just 46 days away from today, with the deadline being on July 31, 2024. Taxpayers should be ready to file their returns anytime now at the tax rates declared by the government. One should note that there are two types of tax regimes -- Old Tax Regime and New Tax Regime. The tax slab rates are different for both.
The Government implemented a new tax regime, Section 115BAC, as an optional alternative to the old tax system from April 1, 2020 (FY 2020-21). Initially, targeting individuals and Hindu Undivided Families (HUF), the regime aimed to provide taxpayers with more flexibility and choice in managing their tax obligations.
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During the Union Budget proceedings for fiscal year 2023-24, Finance Minister Nirmala Sitharaman declared that the new tax structure will be established as the default regime.
New Tax Regime
Constructed with revised tax slabs and concessional tax rates, the New Tax Regime applies uniformly to all categories of taxpayers inclusive of individuals, HUFs and Association Of Persons (AOPs). The present rules stipulate that should taxpayers neglect to declare their preference with their employer, deductions shall be processed according to the New Tax Regime.
The new tax system has limitations. Exemption claims for deductions like HRA, LTA, Sections 80C, 80D, etc., will not be available. These benefits were intended for the Old Tax Regime.
Here are the tax slabs for FY 2024-25 (AY 2025-26)
Up to Rs. 3L NIL
Rs 3L to Rs 6L 5% on income which exceeds Rs 3,00,000
Rs 6L to Rs 9L Rs 15,000 + 10% on income more than Rs 6,00,000
Rs 9L to Rs 12L Rs 45,000 + 15% on income more than Rs 9,00,000
Rs 12L to Rs 15L Rs 90,000 + 20% on income more than Rs 12,00,000
Above Rs 15L Rs 150,000 + 30% on income more than Rs 15,00,000
New Tax Regime Exemption List (not exclusive)
> Transport Allowances w.r.t. Person with Disabilities (PwD)
> Conveyance Allowance
> Travel/ Tour/ Transfer Compensation
> Exemptions for Voluntary Retirement Scheme u/ Section 10(10C)
> Gratuity Amount u/ Section 10(10)
> Leave Encashment u/ Section 10(10AA)
> Deductions on Deposits in Agniveer Corpus Fund u/ Section 80CCH(2)
Old Tax Regime
The old tax regime provides several tax exemptions and deductions for individuals. Some of the frequently claimed exemptions and deductions include house rent allowance (HRA), leave travel allowance (LTA), deductions under Sections 80C, 80D, 80CCD(1b), 80CCD(2), and others.
> Income up to Rs 2.5 lakh is exempt from taxation under the old tax regime.
> Income between Rs 2.5 lakh to Rs 5 lakh is taxed at the rate of 5% under the old tax regime.
> Personal income from Rs 5 lakh to Rs 10 lakh is taxed at a rate of 20% in the old regime
> Under the old regime personal income above Rs 10 lakh is taxed at a rate of 30%.
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