The Union Budget 2024 has brought significant changes to the income tax slabs under the new tax regime. These changes aim to simplify the tax structure and provide relief to taxpayers. Here’s a detailed guide to understanding the new income tax slabs for FY 2024-2025.
New Income Tax Slabs for FY 2024-2025
Under the New Tax Regime:
1. Income up to ₹3 lakh: Nil
2. Income from ₹3 lakh to ₹7 lakh: 5%
3. Income from ₹7 lakh to ₹10 lakh: 10%
4. Income from ₹10 lakh to ₹12 lakh: 15%
5. Income from ₹12 lakh to ₹15 lakh: 20%
6. Income above ₹15 lakh: 30%
Under the Old Tax Regime:
1. Income up to ₹2.5 lakh: Nil
2. Income from ₹2.5 lakh to ₹5 lakh: 5%
3. Income from ₹5 lakh to ₹10 lakh: 20%
4. Income above ₹10 lakh: 30%
Key Features of the New Tax Regime:
1. Uniform Tax Rates: The new tax regime offers uniform tax rates for all individual categories, including regular individuals, senior citizens, and super senior citizens.
2. Tax Rebate for Low-Income Individuals: Individuals with a net taxable income of up to ₹7 lakh qualify for a tax rebate under section 87A, resulting in zero tax liability.
3. Surcharge on High Income:
- 10% for income above ₹50 lakh
- 15% for income above ₹1 crore
- 25% for income above ₹2 crore
- 37% for income above ₹5 crore (reduced to 25% in the current year)
How to Calculate Your Tax Liability
Example Calculation:
Let’s assume Priya has a total taxable income of ₹10 lakh. Here’s how her tax liability would be calculated under the new regime:
1. Income up to ₹3 lakh: Nil
2. Income from ₹3 lakh to ₹7 lakh (₹4 lakh): 5% of ₹4 lakh = ₹20,000
3. Income from ₹7 lakh to ₹10 lakh (₹3 lakh): 10% of ₹3 lakh = ₹30,000
Total Tax: ₹20,000 + ₹30,000 = ₹50,000
Additionally, a 4% Health and Education Cess will be applied:
- Cess: 4% of ₹50,000 = ₹2,000
Total Tax Liability: ₹50,000 + ₹2,000 = ₹52,000
Benefits of the New Tax Regime:
- Simplified Structure: The new tax regime simplifies the tax calculation process.
- Higher Rebate: Increased rebate for incomes up to ₹7 lakh.
- Lower Surcharge: Reduced surcharge for high-income earners, making it more attractive for higher-income individuals.
Comparing Old and New Regimes:
The choice between the old and new tax regimes depends on individual circumstances, such as eligible deductions and exemptions. Taxpayers should compare their tax liability under both regimes before making a decision.
Conclusion
The new income tax slabs introduced in the Union Budget 2024 offer several benefits, including simplified tax rates and higher rebates for low-income individuals. Taxpayers should evaluate their specific situations to determine which regime provides the maximum benefit. For more personalized advice, consult with financial professionals like those at Verotus Finlegal Solutions LLP.
By understanding these changes and making informed decisions, taxpayers can optimize their tax liabilities and achieve better financial planning.
For more information, visit our website
Verotus Finlegal Solutions LLP : http://www.verotusllp.com
Sources :
- IndiaFilings : https://www.indiafilings.com
- Mint : https://www.livemint.com
