Income Tax Slabs: The financial year 2023-24 ended on 31st March. We have entered a new financial year. In this order, especially the tax payers are advised which tax system to choose. It is known that the Center brought the new tax system by default last year. However, after seeing the benefits, you can switch to the old tax system. See for yourself which of the two is better.
Income Tax Regimes: India currently has two tax regimes for taxpayers. Tax filing method can be chosen based on financial conditions and tax benefits including investments. Now we have entered the new financial year on April 1. Employees will have to choose between the old and new tax regimes. If nothing is selected, the new tax system will be applied by default from April 1. But compared to the old tax system, it seems that more tax can be saved in the new tax system. On the other hand, for investors, through other methods including section 80c, a maximum of Rs. 2 lakhs can be saved. Let us now look at the benefits of both.
Old vs New Tax Regime
Union Finance Minister Nirmala Sitharaman did not make any changes in the recent budget regarding Standard Deduction. But in the old and new tax systems, the standard deduction is Rs. 50 thousand is the same. But the main difference between the two is deductions and examinations.
Under the old tax regime under Section 80c of the Income Tax Act the maximum amount in a financial year is Rs. 1.50 lakh tax can be reduced. This applies to investments in PPF, Mutual Funds, Sukanya Samriddhi etc. In NPS Rs. You can get tax benefit up to 2 lakhs. Also deductions can be claimed under Section 80D, Section 80TTA.
However, in this new tax system.. based on the income bracket, you can benefit from the reduced tax rates. But deductions are less. Section 80C benefits are not available in this.
Income Tax slabs..
In the new tax system Rs. No tax on income up to 3 lakhs. Including provision of tax rebate under section 87A of Rs. If the income is 3-6 lakhs then there will be 5% tax. Rs. 10 percent tax is applicable for income of 6-9 lakhs. But here Rs. Income up to 7 lakhs can be tax exempted. Rs. 15 percent on income of 9-12 lakhs, 20 percent on income of Rs.12-15 lakhs, Rs. If the income is more than 15 lakhs then 30 percent tax has to be paid.
Under the old tax system, no tax is required to be paid up to Rs 2.5 lakh. Rs. 5% tax on income between 2.5 lakh to 5 lakh. Rs. 5-10 lakh income 20 percent, Rs. 30 percent tax on income above 10 lakhs.
By default..
The new income tax regime will be applicable automatically. So the employees have to choose the tax scheme of their choice and inform the company at the beginning of the financial year. If the company is not told.. the income tax returns can be changed before filing due date. Or the new tax regime will be implemented by default.
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