ITR Filing: New Changes Brought By New Tax Regime

Outlook Money

New Tax Regime

The new tax regime has impact on tax filing return for the Assessment Year 2024-25, for which the income tax return has to be filled by July 31, 2024.

New Tax Regime

Changes; Default Regime

The new tax regime is the default one now. It means if any taxpayer does not choose the old tax regime, the new tax regime is selected as the default one.

Default Regime

Raised Taxable Income Limit

Previously, a rebate of Rs 12,500 was available on incomes up to Rs 5 lakh, which made incomes up to Rs 5 lakh as tax-free. This was enhanced to Rs 25,000 for incomes up to Rs 7 lakh, effectively making income up to that threshold tax-free in Budget 2023.

Change In Tax Slabs

There are six slabs in the new tax regime instead of seven now. For instance, income up to Rs 3 lakh is tax-free. For Rs 3,00,001-6 lakh, it is 5 per cent. For Rs 6,00,001-9 lakh, it is 10 per cent, and so on.

Raised Basic Exemption Limit

The basic exemption limit for individual taxpayers is Rs 3 lakh in AY 24-25, up from Rs 2.5 lakh in AY 23-24.

Standard Deduction Introduced

The standard deduction of Rs 50,000 available under the old tax regime is available to taxpayers in the new tax regime as well.

Tax Deductions

Reduced Levy of Surcharge

The peak surcharge rate has been reduced from 37 per cent to 25 per cent, thus effectively reducing the overall tax rate for individuals in the highest tax bracket from 42.74 per cent to 39 per cent for AY 24-25.