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Income Tax Slabs for FY 2024-25 (New & Old Regime Tax Rates)

By Mohammed S Chokhawala

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Updated on: Oct 28th, 2024

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25 min read

The income tax is a direct tax which follows a progressive slab rate, where the rate of tax increases as the taxpayer's income rises. The Income-tax Act, 1961 provides for two tax regimes: the old regime, which allows various deductions and exemptions, and the new regime, which offers lower tax rates without exemptions. 

In Budget 2024, the tax slabs for the new regime was revised as follows: Rs. 0 to Rs. 3,00,000 - 0%, Rs. 3,00,001 to Rs. 7,00,000 - 5%, Rs. 7,00,001 to Rs. 10,00,000 - 10%, Rs. 10,00,001 to Rs. 12,00,000 - 15%, Rs. 12,00,001 to Rs. 15,00,000 - 20% and Above Rs. 15,00,001 - 30%.

  In this article, we will learn about:

  • Income Tax Slabs under the old regime
  • Income Tax Slabs under the new regime
  • Comparison of Tax slabs under both the regimes
  • How to calculate income tax under both tax regimes
  • Meaning of Surcharge 
  • Consequences of not filing ITR within the due date

Budget 2024 Update: Tax Slabs Under New Regime Updated

The Budget 2024 has revised the tax slabs in the New Regime, providing taxpayers with an extra opportunity to save Rs. 17,500 in taxes. Additionally, the standard deduction has been raised to Rs. 75,000 under this regime and the family pension deduction has been increased to Rs. 25,000 from Rs. 15,000. This is applicable for the FY 2024-25. The following is the tax slabs:

Tax Slab for FY 2024-25
Tax Rate
Upto ₹ 3 lakh Nil
₹ 3 lakh - ₹ 7 lakh5%
₹ 7 lakh - ₹ 10 lakh 10%
₹ 10 lakh - ₹ 12 lakh 15%
₹ 12 lakh - ₹ 15 lakh20%
More than ₹ 15 lakh30%

What is an Income Tax Slab?

In India, the Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person's income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. These slab rates vary for different groups of taxpayers.

Let us take a look at all the slab rates applicable for FY 2023-24(AY 2024-25) and FY 2024-25(AY 2025-26).

Old Tax Regime:

Old tax regime - tax slab

For Old Regime, a tax rebate up to Rs.12,500 is applicable if the total income does not exceed Rs 5,00,000 (not applicable for NRIs).

New Tax Regime:

Tax Slab for FY 2023-24

Tax Rate 

Tax Slab for FY 2024-25

Tax Rate

Upto ₹ 3 lakh 

Nil

Upto ₹ 3 lakh 

Nil

₹ 3 lakh - ₹ 6 lakh

5%

₹ 3 lakh - ₹ 7 lakh

5%

₹ 6 lakh - ₹ 9 lakh 

10%

₹ 7 lakh - ₹ 10 lakh 

10%

₹ 9 lakh - ₹ 12 lakh 

15%

₹ 10 lakh - ₹ 12 lakh 

15%

₹ 12 lakh - ₹ 15 lakh

20%

₹ 12 lakh - ₹ 15 lakh

20%

More than 15 lakh

30%

More than 15 lakh

30%

NOTE:

  • In the case of old tax regime Income tax exemption limit is
    • up to Rs 2,50,000 for Individuals, HUF below 60 years aged and NRIs.
    • up to Rs 3,00,000 for senior citizens aged above 60 years but less than 80 years.
    • up to Rs 5,00,000 for super senior citizens aged above 80 years.
  • Surcharge and cess will be applicable over and above the tax rates

However, under the new tax regime rebate is up to Rs.25,000 is applicable if the total income does not exceed Rs 7,00,000. (not applicable for NRIs). Additionally, the standard deduction has been raised from Rs. 50,000 to Rs. 75,000 under the new tax regime.

NOTE:

  • Income tax exemption limit is up to Rs 3,00,000 for Individuals, HUF opting for the new regime.
  • Surcharge and cess will be applicable over and above the tax rates.

Comparison of Tax Rates Under New Tax Regime & Old Tax Regime 

 
Old Tax Regime (FY 2022-23, FY 2023-24 and FY 2024-25)New Tax Regime
Income SlabsAge < 60 years & NRIsAge of 60 Years to 80 yearsAge above 80 YearsFY 2022-23FY 2023-24FY 2024-25
Up to ₹2,50,000NILNILNILNILNILNIL
₹2,50,001 - ₹3,00,0005%NILNIL5%NILNIL
₹3,00,001 - ₹5,00,0005%5%NIL5%5%5%
₹5,00,001 - ₹6,00,00020%20%20%10%5%5%
₹6,00,001 - ₹7,00,00020%20%20%10%10%5%
₹7,00,001 - ₹9,00,00020%20%20%15%10%10%
₹9,00,001 - ₹10,00,00020%20%20%15%15%10%
₹10,00,001 - ₹12,00,00030%30%30%20%15%15%
₹12,00,001 - ₹12,50,00030%30%30%20%20%20%
₹12,50,001 - ₹15,00,00030%30%30%25%20%20%
₹15,00,000 and above30%30%30%30%30%30%

Income Tax Slab Rates For FY 2024-25 (AY 2025-26)

a. New Tax regime until 31st March 2025

Tax Slab for FY 2023-24Tax Rate
Upto 3,00,000Nil
3,00,001 - 7,00,0005%
7,00,001 - 10,00,00010%
10,00,001 - 12,00,00015%
12,00,001 - 15,00,00020%
Above 15,00,00030%

* Tax rebate up to Rs.25,000 is applicable if the total income does not exceed Rs 7,00,000 (not applicable for NRIs).

b. Old Tax regime                                    

Income tax slabs for individuals aged below 60 years & HUF

Income SlabsIndividuals of Age < 60 Years and NRIs
Up to Rs 2,50,000NIL
Rs 2,50,001 - Rs 5,00,0005%
Rs 5,00,001 to Rs 10,00,00020%
Rs 10,00,001 and above30%

NOTE:

  • The income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged, and NRIs.
  • Surcharge and cess will be applicable.

Income tax slab for individuals aged above 60 years to 80 years

Income SlabsIndividuals of Age 60 Years to 80 Years
Up to Rs 3,00,000NIL
Rs 3,00,001 - Rs 5,00,0005%
Rs 5,00,001 to Rs 10,00,00020%
Rs 10,00,001 and above30%

NOTE:

  • The income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
  • Surcharge and cess will be applicable. 

Income tax slab for Individuals aged more than 80 years

Income SlabsIndividuals of Age above 80 Years
Up to Rs 5,00,000NIL
Rs 5,00,001 to Rs 10,00,00020%
Rs 10,00,001 and above30%

NOTE:

  • Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
  • Surcharge and cess will be applicable 

Revised Income Tax Slab Rate Calculation for AY 2025-26 (FY 2024-25)– For New Regime

Income SlabsIncome Tax Rates 
Up to Rs 3,00,000Nil
Rs 3,00,000 to Rs 7,00,0005% on income which exceeds Rs 3,00,000 
Rs 7,00,000 to Rs 10,00,000Rs. 20,000 + 10% on income more than Rs 7,00,000
Rs 10,00,000 to Rs 12,00,000Rs. 50,000 + 15% on income more than Rs 10,00,000
Rs 12,00,000 to Rs 1500,000Rs. 80,000 + 20% on income more than Rs 12,00,000
Above Rs 15,00,000Rs. 1,40,000 + 30% on income more than Rs 15,00,000

Income Tax Slab Rate Calculation AY 2024-25 (FY 2023-24) – For New Regime

Income SlabsIncome Tax Rates       
Up to Rs 3,00,000Nil
Rs 3,00,000 to Rs 6,00,0005% on income which exceeds Rs 3,00,000 
Rs 6,00,000 to Rs 900,000Rs. 15,000 + 10% on income more than Rs 6,00,000
Rs 9,00,000 to Rs 12,00,000Rs. 45,000 + 15% on income more than Rs 9,00,000
Rs 12,00,000 to Rs 1500,000Rs. 90,000 + 20% on income more than Rs 12,00,000
Above Rs 15,00,000Rs. 150,000 + 30% on income more than Rs 15,00,000

Default Regime

From FY 2023-24 the new tax regime is the default regime. If you want to file your ITR under the old regime then you have to file Form 10-IEA.

How to Calculate Income Tax from Income Tax Slabs?

Illustration 1: Rohit has a total taxable income of Rs 8,00,000. This income has been calculated by including income from all sources, such as salary, rental income, and interest income. Deductions under Section 80 have also been reduced. Rohit wants to know his tax dues as per the old regime for FY 2023-24 (AY 2024-2025).

Income Tax SlabsTax RateTax Amount
*Income up to Rs 2,50,000No tax-
Income from Rs 2,50,000 – Rs 5,00,0005% (Rs 5,00,000 – Rs 2,50,000)Rs 12,500
Income from Rs 5,00,000 – 10,00,00020% (Rs 8,00,000 – Rs 5,00,000)Rs 60,000
Income more than Rs 10,00,00030%-
Tax Rs 72,500
Cess4% of Rs 72,500Rs 2,900
Total tax in FY 2023-24 (AY 2024-25)Rs 75,400

Note:

Please note that Rohit is an individual taxpayer assessee having an income tax exemption of Rs 2,50,000. For other taxpayer assessees, i.e. senior citizens and super senior citizens, the Income-tax limit for availing the exemption would be Rs 3,00,000 & Rs 5,00,000, respectively.

Individuals with net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A under the old tax regime, i.e. tax liability will be NIL.

Important Points to note if you select the new tax regime:

  • Please note that the tax rates in the New tax regime are the same for all categories of Individuals, i.e. Individuals, Senior citizens, and Super senior citizens. 
  • Individuals with net taxable income less than or equal to Rs 7 lakh will be eligible for tax rebate u/s 87A, i.e. tax liability will be NIL under the new regime.

What is Surcharge?

In case the income exceeds a certain threshold, the additional taxes are to be paid over and above existing tax rates. This is an additional tax on the High Income Earners.

Surcharge rates are as below:

10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,

15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,

25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,

37% of Income tax if total income > Rs.5 crore            
*In Budget 2023, the highest surcharge rate of 37% has been reduced to 25% under the new tax regime. (applicable from 1st April 2023)

  • Surcharge rates of 25% or 37% will not apply to the income from dividends and capital gains taxable under sections 111A (Short Term Capital Gain on Shares)112A (Long Term Capital Gain on Shares), and 115AD (Tax on the income of Foreign Institutional Investors). Therefore, the highest surcharge rate on the tax payable for such incomes will be 15%.
  • The surcharge rate for an Association of Persons (AOP) consisting entirely of companies will also be limited to 15%.

Additional Health and Education cess at the rate of 4% will be added to the income tax liability.

What are the Major Procedural Changes in Filing of Income Tax Return from FY 2022-23 to FY 2023-24?

  1. For FY 2022-23, the default regime used to be the Old tax regime, if you wanted to go for the New tax regime, you were required to submit Form 10-IE. After the due date, you have to mandatorily file under the old regime only. 
  2. For FY 2023-24, the default regime changed to the new tax regime, now if you want to file the return under the old tax regime by claiming all the deductions, exemptions, and losses, then you have to file Form 10-IEA within the due date. After the due date, you have to mandatorily file under the new regime by giving up on most of the deductions and exemptions and all losses.

Consequences of Not Filing the Return Within the Due Date for AY 2024-25

With the failure to file the return within the due date for FY 2023-24, the taxpayer must opt for concessional rates in the New Tax regime but will have to forgo certain exemptions and deductions available in the existing old tax regime. 

In total there are 70 deductions & exemptions that are not allowed, out of which the most commonly used are listed below:

ParticularsOld Tax RegimeNew Tax regime (until 31st March 2023)New Tax Regime (From 1st April 2023)
Income level for rebate eligibility₹ 5 lakhs₹ 5 lakhs₹ 7 lakhs
Standard Deduction₹ 50,000₹ 50,000
Effective Tax-Free Salary income₹ 5.5 lakhs₹ 5 lakhs₹ 7.5 lakhs
Rebate u/s 87A12,50012,50025,000
HRA ExemptionXX
Leave Travel Allowance (LTA)XX
Other allowances including food allowance of Rs 50/meal subject to 2 meals a dayXX
Entertainment Allowance Deduction and Professional TaxXX
Perquisites for official purposes
Interest on Home Loan u/s 24b on self-occupied or vacant propertyXX
Interest on Home Loan u/s 24b on let-out property
Deduction u/s 80C (EPF|LIC|ELSS|PPF|FD|Children’s tuition fee etc)XX
Employee’s (own) contribution to NPSXX
Employer’s contribution to NPS
Medical insurance premium – 80DXX
Disabled Individual – 80UXX
Interest on education loan – 80EXX
Interest on Electric vehicle loan – 80EEBXX
Donation to Political party/trust etc – 80GXX
Savings Bank Interest u/s 80TTA and 80TTBXX
Other Chapter VI-A deductionsXX
All contributions to Agniveer Corpus Fund – 80CCHDid not exist
Deduction on Family Pension IncomeX
Gifts up to Rs 50,000
Exemption on voluntary retirement 10(10C)
Exemption on gratuity u/s 10(10)
Exemption on Leave encashment u/s 10(10AA)
Daily Allowance
Transport Allowance for a specially-abled person
Conveyance Allowance

Comparison of Income Tax Slabs under New Regime Before and After Budget

Only the Income tax slabs under the new regimes were revised in the Union Budget 2023.

SlabNew Tax Regime FY 2022-23 (AY 2023-24)New Tax Regime FY 2023-24 (AY 2024-25)
₹0 - ₹2,50,000
₹2,50,000 - ₹3,00,0005%
₹3,00,000 - ₹5,00,0005%5%
₹5,00,000 - ₹6,00,00010%5%
₹6,00,000 - ₹7,50,00010%10%
₹7,50,000 - ₹9,00,00015%10%
₹9,00,000 - ₹10,00,00015%15%
₹10,00,000 - ₹12,00,00020%15%
₹12,00,000 - ₹12,50,00020%20%
₹12,50,000 - ₹15,00,00025%20%
>₹15,00,00030%30%

Old Tax regime Vs New Tax Regime - Which is Better?

The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up to Rs 15 lakh. The old regime is a better option for high-income earners.

The new income tax regime is beneficial for people who make low investments. As the new regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee having total income before deduction up to Rs 12 lakh will have higher tax liability under the old system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-saving schemes, go for the new regime.

That being said, if you already have in place a financial plan for wealth creation by making investments in tax-saving instruments; medical claims and life insurance; making payments of children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan; and so on, the old regime helps you with higher tax deductions and lower tax outgo.

In light of the above and considering the new income tax regime, if taxpayers want to opt for the concessional tax rates, they may evaluate both regimes. Hence, it is advisable to do a comparative evaluation and analysis under both regimes and then choose the most beneficial one, as it may vary from person to person. Read a detailed breakdown on this topic here.

When Can I Opt for Old vs New regime?

Nature of IncomeTime of Selection of option of old vs new regime
Income from Salary or any other head of income attracting TDSAt the start of the financial year, an employee has the choice to select the tax regime and inform their employer, whereas the default regime shall be new tax regime. It cannot be modified during the year. However, the option can be modified when filing the Income Tax Return.
Income from Business & ProfessionIn case you have Business or professional income, the choice between tax regimes can only be made once in a lifetime.

Income Tax Rate for Domestic Companies 

ParticularsOld regime Tax ratesNew Regime Tax rates
Company opts for section 115BAB (not covered in sections 115BA and 115BAA) & is registered on or after October 1, 2019, and has commenced manufacturing on or before 31st March 2024 and subject to the conditions specified in the section.15%
Company opts for Section 115BAA, wherein the total income of a company has been calculated without claiming specified deductions, incentives, or exemptions and additional depreciation as specified in the section.22%
The company opts for section 115BA registered on or after March 1, 2016 and engaged in the manufacture of any article or thing and does not claim the deduction as specified in the section.25%
Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2020-2125%25%
Any other domestic company30%30%

*Please refer to the new sections for checking the applicability for the above concessional income tax rates.

NOTE:

  • Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases.
  • Surcharge applicable for companies is as below:
  • 7% of Income tax where total income > Rs 1 crore,
  • 12% of Income tax where total income > Rs.10 crore,
  • 10% of income tax where domestic company opted for section 115BAA and 115BAB.

Income Tax Rate for Partnership Firm or LLP as per Old/New Regime

A partnership firm/ LLP is taxable at 30%.            
NOTE:

  • 12% Surcharge is levied on income is more than Rs 1 crore
  • Health and Education Cess at the rate of 4% will be applicable
  • No concessional rates are introduced for firms LLPs in the next tax regime

Income Tax Slab for FY 2022-23 and FY 2024-25 for Domestic Companies

Turnover Particulars

Tax Rate

Gross turnover up to 250 Cr. in the previous year

25%

Gross turnover exceeding 250 Cr. in the previous year

30%

NOTE:

  • In addition cess and surcharge are levied as follows: 
    • Cess: 4% of corporate tax
    • Surcharge applicability:
      • Taxable income is more than 1 Crore but less than 10 Crores: 7%
      • Taxable income is more than 10 Crores: 12%

Related Articles:
Old vs New Tax Regime
Section 115BAC of Income Tax Act
Income Tax Changes From 1 April 2024: New Tax Regime Will Be Default
Form 10-IEA Purpose, Applicability, How to Fill & Submit Form
Tax free Income in India
E-Return Intermediary (ERI) Income Tax
Form 61B of Income-tax Act
Form 26B of Income-tax Act
CRN Number in Income Tax
Income Tax Customer Care 

How To Save Tax:
How to Save Tax for Salary Above 7 Lakhs?
How To Save Tax For Salary Above 10 Lakhs?
How to Save Tax for Salary Above 12 Lakhs?
How To Save Tax For Salary Above 15 Lakhs?
How To Save Tax For Salary Above 20 Lakhs?
How To Save Tax For Salary Above 30 Lakhs?
How To Save Tax For Salary Above 50 Lakhs?
How to Save Tax For Salary Above 1 crore?

Frequently Asked Questions

Can I claim 80C deductions and opt for a new income tax slab regime?

No, the new tax regime does not allow many deductions and exemptions which are otherwise available in the old tax regime. Deductions u/s 80C cannot be claimed if the taxpayer is opting for a New tax regime

How does the government collect the taxes?

Taxes are collected by the Government through three means: 

  • Voluntary payment by taxpayers through various designated Banks. For example, Advance Tax and Self Assessment Tax payments,
  • Taxes deducted at source [TDS] and 
  • Taxes collected at source [TCS].
Are there separate slab rates for different categories?

Yes, there are separate slab rates under the old tax regimes. However under the new tax regimes, there is no categories as such.

Do I need to file an Income Tax Return (ITR) if my annual income is below ₹3 lakh of the basic exemption limit?

Even if your income is below the exemption limit, you must file your ITR if any of these conditions apply to you.

Is the due date for filing an income tax return the same for all taxpayers?

No, the due date for all the taxpayers is not the same. For individual taxpayers for whom tax audit is not applicable, the due date is 31st July of the assessment year unless extended by the government.

What is the meaning of rebate under section 87A under the IT Act?

Section 87A is a legal provision which allows for tax rebates under the Income Tax Act of 1961. The section, which was inserted through the Finance Act of 2013, provides tax relief for individuals earning below a specified limit. Section 87 A provides that anyone who is residing in India and whose income does not exceed Rs 5,00,000 is eligible to claim a rebate. Thus full income tax rebate is available to individuals with less than Rs 5 Lakh of total taxable income under the old regime, whereas under the new tax regime, the income limit is Rs. 7,00,000. This rebate is applicable only to individuals and not companies, etc and is calculated before adding the health and educational cess of 4 %.

Who decides the IT slab rates, and can they change?

Yes, IT slab rates can be changed by the government. If there are changes in IT slab rates for the financial year, then they are introduced in the Budget and presented in Parliament.

What is the Previous year and Assessment year?

The Income-tax law has two important terms: (i) Previous year and (ii) Assessment year. It is extremely important for determining the taxpayer's income and tax payable amount.        
The previous year is the year in which the income is earned which typically starts on 1st April and ends on 31st March. Whereas, the year immediately following the previous year (1st April to 31st March) is known as ‘Assessment Year’.           
For example, the current previous year is from 1st April 2023 to 31st March 2024, i.e. FY 2023-24. The corresponding assessment year is 1st April 2024 to 31st March 2025, i.e. AY 2024-25.

How to file an income tax return online?

To submit your income tax return online, log on to either the income tax e-filing portal or you can also e-file through Cleartax. For e-filing through the income tax portal, log in to www.incometax.gov.in. You can also download the offline JSON utility and file the ITR. Remember to verify the return within 30 days of filing the ITR. ITR filing is incomplete without verification, failure to verify the return will be deemed that you have not filed the return at all.        
Please click here to read the step-by-step guide on how to e-file ITR on the income tax e-filing portal.

How much income is tax free in India?

Income tax law has prescribed a basic exemption limit for individuals up to which the taxpayers are not required to pay taxes. Such a limit is different for different categories of taxpayers under old tax regime. Individual below 60 years of age are not required to pay tax upto the income limit of Rs 2.5 Lakh. Individuals above 60 years but less than 80 years of age are not required to pay tax upto Rs 3 lakh of income. Individuals above 80 years are not required to pay tax upto Rs 5 lakh of income. The basic exemption limit for all the individuals under the new tax regime is Rs 3 lakh, irrespective of age.

How to calculate surcharge on income tax?

The surcharge is a tax on tax. Hence surcharge is calculated on the tax payable and not on the income earned. For example, if you have an income of Rs 1000 with 30% tax of Rs. 300, if the income is subject to surcharge then 10% surcharge would be levied on tax of Rs. 300 i.e. Rs 30. Surcharge is levied at different rates i.e 

  • 10% of income tax if total income is > 50 lakh, 
  • 15% of income tax if total income is > 1 crore, 
  • 25% of income tax if total income is > 2 crores,
  • 37% of Income tax if total income > Rs.5 crore 

The highest surcharge rate of 37% has been reduced to 25% under the new tax regime. 

How to calculate the age of a senior citizen for income tax?

Individual above the age of 60 years is regarded as a senior citizen whereas an individual above 80 years is regarded as a super senior citizen for the purpose of income tax. Senior citizens and super senior citizens have been provided higher tax exemption limits and specific benefits by the income tax law in order to provide some relief.

How to pay income tax online?

The income tax payment facility has been migrated from OLTAS to the 'e-Pay Tax' facility of the e-filing portal. You can refer to this step-by-step guide for making your tax payments.

Will my income be taxed if I am an agriculturist?

Any income which is generated from agriculture or its allied activities will not be taxed. However, it will be considered for determining the tax rate while calculating tax on any non-agricultural income that you may have.

If my income is 5 lakh, how much tax do I have to pay?

No tax is payable since tax rebate is available upto Rs. 5 lakh under old regime and Rs. 7lakh under new regime.

If my income is 7 lakh, how much tax do I have to pay?

No tax is payable under the new tax regime up to Rs. 7 lakh. 

If my income is 10 lakh, how much tax do I have to pay?

New Regime: 62,400

Old Regime: 1,17,000

If my income is 15 lakh, how much tax do I have to pay?

New Regime: 1,56,000

Old Regime: 2,73,000

If my income is 20 lakh, how much tax do I have to pay?

New Regime: 3,12,000

Old Regime: 4,29,000

These taxes have been calculated based on the assumption that they are Net Taxable Income after deducting all deductions. However, you may add your exact income details on this simplified income tax calculator to find out the exact tax payable. If you are calculating for FY 2023-24, make sure to select the correct financial year.

Do I have to mandatorily opt for a New tax regime while filing returns for AY 2024-25?

Taxpayers have the freedom to select the tax regimes, if one needs to opt for the old regime and claim deductions, exemptions, and losses must file their income tax returns by opting out of the new regime.

For employees, the choice needs to be made at the beginning of the year and can be modified at the time of ITR filing. However, if you are engaged in business or profession, the option to switch to the Old Tax regime is available only once in your lifetime. We recommend that you carefully evaluate your tax outgo under both regimes and then select the one which is most beneficial to you.

What is e-verification of Income tax returns? How to do it?

The income tax return needs to be verified post submission. It is applicable for all types of return original, belated, revised or updated return. It is mandatory to do verify the return within 30 days from the date of filing. Failure to verify the return will be deemed that you have not filed the return at all. One can do the verification either by physically by appending the signature on the ITR acknowledgement form (ITR V) manually and sending it to CPC, Bengaluru by courier or post OR electronically via Aadhaar OTP or EVC (electronic verification code) or Digital signature during or after the submission of Income tax return.

Is standard deduction applicable in the new tax regime?

Yes, the standard deduction is allowed under the new tax regime for FY 2023-24. However, it was not allowed as a deduction for FY 2022-23. 

What deductions are allowed in the new tax regime?

One can claim a few selective deductions under the new tax regime for FY 2023-24, such as a standard deduction of Rs.50,000, interest on Home Loan u/s 24b on let-out property, employer’s contribution to NPS u/s 80CCD, Contributions to Agniveer Corpus Fund u/s 80CCH, Deduction on Family Pension Income (lower of 1/3rd of actual pension or 15,000).

Is HRA exemption available in new tax regime?

No, HRA exemption u/s10(13A) is not allowed in new tax regime. Along with that most claimed exemptions are also NOT allowed such as Leave Travel Allowance (LTA), Exemption on voluntary retirement 10(10C), Exemption on gratuity u/s 10(10), Exemption on Leave encashment u/s 10(10AA), Daily Allowance, Transport Allowance for a specially-abled person, Conveyance Allowance etc,

How to choose the tax regimes while filing?

There are differential process to opt in for tax regimes between FY 2022-23 and FY 2023-24.

For 2022-23 - default regime is old tax regime

If the total income does not include profit and gains from business & profession and new tax regime needs to be opted, then one must file Form 10IE (online form from Income Tax portal) before the submission of income tax return by clicking Yes for “Do you opt for sec 115BAC(1)?”, else one must file income tax return only without the requirement to file Form 10IE. In both the scenarios return must be submitted within the due date.

For 2023-24 - default regime is new tax regime

If the total income does not include profit and gains from business & profession and new old regime needs to be opted, then one must file Form 10IEA (online form from Income Tax portal) before the submission of income tax return by clicking Yes for “Do you opt out from sec 115BAC(1A)?”, else one must file income tax return only without the requirement to file Form 10IEA. In both the scenarios return must be submitted within the due date.

Which form has to be filed for opting the old tax regime?

Form 10-IEA must be filed before the due date for opting to pay taxes under the old tax regime.

What happens if an individual doesn’t submit the Form 10-IEA timely?

If an individual forgets to complete the submission of Form 10-IEA before or during the filing of the ITR, they will be unable to choose the old tax regime. The delayed submission of the form of failure to submit means that the income tax department will compute tax as per the new tax regime.

Is there any changes in the new tax regime for FY 2024-25?

Yes. The new tax regime has been revised in the Budget 2024 for FY 24-25. 

Can we save tax on the new tax regime?

Budget 2024 has proposed a revision in the Tax Slab for new tax regime for FY 24-25. As a result, taxpayers choosing the new tax regime stand to gain as much as Rs.17,500.

Has the slab rate under the old tax regime changed in Budget 2024?

No, According to the Union Budget 2024 the slab rate under the old tax regime remains unchanged for the FY 24-25.

About the Author

I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more

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Quick Summary

Income tax in India follows a progressive slab rate system under the Income-tax Act, 1961 with old and new regimes offering different tax rates and deductions. For FY 2024-25, the tax slabs have been revised providing more opportunities to save on taxes. Taxpayers can choose between the old and new regimes based on their income and investments.

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