The Indian income tax regime has undergone significant changes, especially concerning the applicability and options available for taxpayers under Section 115BAC. Additionally, there are changes in the tax slabs under the new regime starting from the Financial Year (F.Y.) 2023-24. Here, we present a detailed comparison of the ITR filing options available till Assessment Year (A.Y.) 2023-24 and the changes implemented from A.Y. 2024-25 onwards.
Changes in Tax Slabs for the New Regime from F.Y. 2023-24
| Income Range (₹) | Tax Rate till F.Y. 2022-23 | Income Range (₹) | Tax Rate from F.Y. 2023-24 onwards |
|---|---|---|---|
| Up to 2,50,000 | Nil | Up to 3,00,000 | Nil |
| 2,50,001 to 5,00,000 | 5% | 3,00,001 to 6,00,000 | 5% |
| 5,00,001 to 7,50,000 | 10% | 6,00,001 to 9,00,000 | 10% |
| 7,50,001 to 10,00,000 | 15% | 9,00,001 to 12,00,000 | 15% |
| 10,00,001 to 12,50,000 | 20% | 12,00,001 to 15,00,000 | 20% |
| 12,50,001 to 15,00,000 | 25% | Above 15,00,000 | 30% |
| Above 15,00,000 | 30% | – | – |
Other Important Changes
| Comparative | Till A.Y. 2023-24 | A.Y. 2024-25 onwards |
|---|---|---|
| Default Regime | Old Regime | New Regime |
| Section 115BAC | Old Section 115BAC was applicable during A.Y. 2021-22 to A.Y. 2023-24 | New Section 115BAC applicable from A.Y. 2024-25 onwards |
| Applicability | Old 115BAC applicable to Individual and HUF only | New 115BAC applicable to Individuals, HUF, AOP (other than a co-operative society), BOI, and Artificial Juridical Person (AJP) |
| Relevance of Due Date under Section 139(1) | To opt for the New Regime, file ITR on or before the due date under Section 139(1) i.e. 31 July | To opt for the Old Regime, file ITR on or before the due date under Section 139(1) i.e. 31 July |
| Person NOT Having Income from Business or Profession | Taxpayers filing ITR 1 or ITR 2 can select any regime when filing ITR under Section 139(1). After the due date, cannot opt for the New Regime. Every year, they can select any regime beneficial without restrictions. | Taxpayers filing ITR 1 or ITR 2 can select any regime while filing ITR under Section 139(1). After the due date, cannot opt for the Old Regime. Every year, they can select any regime beneficial without restrictions. |
| Person Having Income from Business or Profession | Taxpayers filing ITR 3 or ITR 4 can select any regime when filing ITR under Section 139(1). To opt for the New Regime, file Form 10IE on or before the due date under Section 139(1). After the due date, cannot opt for the New Regime. If opted for the New Regime in the last year, can opt out once by filing Form 10IE before the due date, but cannot opt for the New Regime again. | Taxpayers filing ITR 3 or ITR 4 can select any regime while filing ITR under Section 139(1). To opt for the Old Regime, file Form 10IEA on or before the due date under Section 139(1). After the due date, cannot opt for the Old Regime. If opted for the Old Regime in the last year, can opt out once by filing Form 10IEA before the due date, but cannot opt for the Old Regime again. |
| What if Due Date under Section 139(1) is Missed | Compulsory filing in the Old Regime. Even if the New Regime is beneficial, cannot opt for the New Regime. | Compulsory filing in the New Regime. Even if the Old Regime is beneficial, cannot opt for the Old Regime. Disqualifies from claiming certain deductions such as home loans, school fees, life insurance, and medical insurance. |
New Deductions Available in the New Tax Regime from F.Y. 2023-24
- National Pension System (NPS) Tax Benefits: The money deposited in the National Pension System (NPS) under Section 80CCD (2) by an employee’s employer is eligible for tax exemption. This exemption is available in both the old tax regime and the new tax regime and this is available in earlier years also.
- Tax Exemption on Family Pension Income: Taxpayers who receive income through family pension can avail tax exemption on this amount. Under Section 57 of the Income Tax Act, the amount received as family pension falls outside the scope of income tax, allowing taxpayers to claim exemption on this income. This exemption is applicable in both the old tax regime and the new tax regime, providing financial relief to individuals who rely on family pension as a source of income.
- Standard Deduction: In accordance with Section 16(1) of the Income Tax Act, individuals are entitled to claim a standard deduction of Rs. 50,000 from Income from Salary/Pension. This deduction applies to both the new tax regime and the old tax regime. The provision allows taxpayers to reduce their taxable income by a fixed amount without the need for any specific expenses or investments, easing the tax burden for salaried individuals and pensioners.
- Agniveer Corpus Fund: Contribution to the Agniveer Corpus Fund is allowed as a deduction in the new tax regime as well as the old tax regime under Section 80CCH.
Understanding these updates is crucial for making informed decisions about ITR filing and selecting the appropriate tax regime. Taxpayers should carefully consider the benefits and restrictions of each regime and ensure timely filing to maximize their tax benefits.
Visit www.cagurujiclasses.com for practical courses
Congratulations A work undertaken well done. Avery lucidand easily understandable language with out legal jargon. Keep it up.
J R KOTA
CHARTERED ACCOUNTANT.