Income Tax New Regime of Financial Year 2024-25


Income Tax New Regime of Financial Year 2024-25 | Income Tax New Regime | Financial Year 2024-25

 

For the Financial Year (FY) 4-25 (Assessment Year 5-26), the Government of India has revised the income tax slabs under the new tax regime. The updated tax rates are as follows:

New Tax Regime Slabs:

Income Range

Tax Rate

Up to ₹3,00,000

Nil

₹3,00,001 to ₹7,00,000

5%

₹7,00,001 to ₹10,00,000

10%

₹10,00,001 to ₹12,00,000

15%

₹12,00,001 to ₹15,00,000

20%

Above ₹15,00,000

30%

Additionally, the standard deduction has been increased from ₹50,000 to ₹75,000. With this enhancement, individuals with an income of up to ₹7.75 lakh can effectively be exempt from income tax after accounting for the standard deduction.

The old tax regime remains unchanged. Taxpayers can choose between the old and new regimes based on which is more beneficial for their financial situation.

For a detailed comparison between the old and new tax regimes, including specific income tax slabs and rates, you can refer to the Income Tax Department's official guidelines.

To assist in calculating your tax liability under both regimes, you can use online tools such as the Income Tax Calculator provided by Moneycontrol.

It's advisable to consult with a tax professional or financial advisor to determine which tax regime best suits your individual circumstances.


Key Features of the New Tax Regime

1.    No Tax up to ₹7 lakh: Due to a rebate under Section 87A, individuals with taxable income up to ₹7 lakh do not pay any tax.

2.    Standard Deduction: ₹50,000 is available for salaried individuals and pensioners.

3.    Lower Tax Rates: Compared to the old tax regime.

4.    Fewer Exemptions and Deductions: No benefits for:

o   80C (LIC, PPF, ELSS, etc.)

o   80D (Health Insurance)

o   HRA, LTA (House Rent Allowance, Leave Travel Allowance)

o   Home Loan Interest (Section 24b)

Who Should Opt for the New Tax Regime?

  • Salaried individuals with fewer deductions.
  • Taxpayers who prefer lower tax rates over exemptions.
  • Individuals not heavily investing in tax-saving schemes.

You can still choose between the Old and New Tax Regime based on what benefits you more.

Would you like help calculating your tax under both regimes?