Finance Minister, Nirmala Sitharaman has announced that there will be no changes in the new regime of income tax slab which was introduced under the 2023-2024 budget. People were hoping for a few tweaks but it seems that any possible change would only come after the Lok Sabha elections which are due to be held in April and May this year. Let’s find out in detail about the new income tax regime.
Income Tax Slabs 2024-25 New Tax Regime
| Income Range in INR | Tax Rate % |
| Up to 3 Lakh | Nil |
| 3,00,001 to 6,00,000 | 5 |
| 6,00,001 to 9,00,000 | 10 |
| 9,00,001 to 12,00,000 | 15 |
| 12,00,001, to 15,00,000 | 20 |
| Above 15 Lakh | 30 |
The income tax rates for the financial year 2024-25 under the new tax regime or the concessional tax regime (CTR) are outlined in the table above. These rates, revised by Finance Minister Nirmala Sitharaman in Budget 2023, are applicable to individuals of all age groups.
Income Tax Rebate Under New Regime
In last year’s Union Budget, the eligibility for rebate under the Concessional Tax Regime (CTR) was extended to income up to Rs 7,00,000, offering a tax relief of up to Rs 25,000. Additionally, marginal relief was introduced for resident individuals with a net taxable income surpassing Rs 7 lakh, where the incremental income tax liability exceeds the incremental income beyond Rs 7 lakh.
Also read: Union Budget 2024: FM Sitharaman’s Bold Move for a Greener, Smarter Budget Presentation!
Difference Between New and Old Tax Regime
The new tax regime, initiated in Union Budget 2020, brought about alterations in tax slabs, offering taxpayers concessional tax rates. However, opting for this regime means forgoing several exemptions and deductions such as HRA, LTA, 80C, 80D, and others. In Union Budget 2023, the government introduced significant changes to incentivize taxpayers to embrace the new regime. These include:
- Higher tax rebate limit: The full tax rebate is now applicable to incomes up to ₹7 lakhs, compared to ₹5 lakhs in the old tax regime. Consequently, taxpayers with incomes up to ₹7 lakhs will not be liable to pay any tax under the new tax regime.
Before the introduction of the new regime, the old regime prevailed, offering over 70 exemptions and deductions, including HRA and LTA, which could reduce taxable income and lower tax payments. Notably, Section 80C stands out as one of the most popular and generous deductions, allowing for a reduction of taxable income up to Rs. 1.5 lakh.