New Tax Regime (Section 115BAC(1A)) Introduced in Finance Act 2023, Contrasts with Old Regime sans Exemptions
Updated On – 1 April 2024, 09:21 AM
New Delhi: The Finance Ministry has clarified that there is no new change in the income tax regime that is coming in from April 1, 2024, as is being reported by some social media platforms.
“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 April 1, 2024,” the Finance Ministry said on Sunday in a post on X.
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 new tax regime is applicable for persons other than companies and firms, as a default regime from the Financial Year 2023-24 and the Assessment Year corresponding to this is AY 2024-25, the Finance Ministry said.
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.
The new tax regime is the default tax regime, however, taxpayers can choose the tax regime (old or new) that they think is beneficial to them.
Option for opting out from the new tax regime is available till filing of return for the AY 2024-25.
Eligible persons without any business income will have the option to choose the regime for each financial year. Therefore, they can choose the new tax regime in one financial year and the old tax regime in another year and vice-versa, the Finance Ministry said in a statement.
