Tax FY 2024-25: No Slab Changes, New Tax Regime Explained

The Income Tax Department, under the Ministry of Finance, has confirmed some welcome news for taxpayers! There will be no changes to income tax slabs for the financial year 2024-25. This means the existing tax brackets will continue to apply from April 1, 2024.

The decision to maintain the status quo follows speculation about potential tax revisions. While the government has not officially disclosed the reasons behind its stance, factors like economic stability or focusing on other fiscal priorities may have contributed.

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Clarity On The Subject

While the income tax slabs for FY 2024-25 will remain unchanged, some confusion has arisen regarding the new tax regime introduced in the Finance Act 2023. Let’s clarify things.

New Tax Regime vs. Old Tax Regime

The new tax regime introduced as an alternative to the old regime (without exemptions), applies to individual taxpayers (excluding companies and partnerships). It became the default option from the Financial Year (FY) 2023-24, corresponding to the Assessment Year (AY) 2024-25.

Key Differences:

Tax Rates: The new regime offers lower tax rates than the old regime.
Exemptions and Deductions: Unlike the old regime with various exemptions and deductions, the new regime allows only a standard deduction of Rs 50,000 from salary income and Rs 15,000 from family pensions.

Choosing the Right Regime

Taxpayers can choose the regime (old or new) that best suits their financial situation. They can even switch regimes annually if they don’t have business income.