Govt Denies Reports of Changes in New Income Tax Regime Starting April 1

GG News Bureau
New Delhi, 1st April. The finance ministry clarified on Monday that there have been no changes in the new income tax regime for individuals for the current fiscal year. Individual taxpayers have the option to opt out of the regime when filing their Income Tax Returns (ITR).

Addressing social media posts that suggested changes in the tax regime from April 1, the ministry stated, “There are no new changes coming into effect from 01.04.2024.”

A revised income tax regime was introduced at the beginning of the financial year on April 1, 2023, with significantly lower tax rates for individuals. However, various exemptions and deductions (except for a standard deduction of ₹50,000 from salary and ₹15,000 from family pension) are not available in this new regime.

The new tax regime is the default option, but taxpayers can choose between the old and new regimes based on what they find more beneficial. The option to opt out of the new tax regime is available until the filing of returns for the Assessment Year 2024-25, according to the ministry.

Under the new income tax regime, income up to ₹3 lakh is exempt from tax. Tax rates of 5%, 10%, 15%, 20%, and 30% apply to different income brackets above ₹3 lakh.

The default tax regime since 2023-24, corresponding to the Assessment Year 2024-25, can be changed by the taxpayer when filing their Income Tax Returns (ITR).

Individuals without business income can choose the tax regime for each financial year, allowing them to switch between the new and old regimes as they see fit, the ministry explained.

The old tax regime, which is still applicable and provides various deductions and exemptions, exempts income up to ₹2.5 lakh from taxes. Income between ₹2.5-5 lakh is taxed at 5%, while income between ₹5-10 lakh is taxed at 20%. Income above ₹10 lakh is subject to a 30% tax rate.