New Income Tax Slabs – Direct and Indirect Tax after Interim Budget 2024

Finance Minister Shrimati Nirmala Sitharaman announced in the interim budget for 2024 that there will be no changes to income tax slabs for the fiscal year beginning April 1, 2024 to March 31, 2025. As a result, individuals will continue to calculate their income tax liabilities using the same slabs as the current fiscal year, 2023-24.

It is worth noting that under the income tax laws, individuals with no business income must choose between the new and old tax regimes every year. This means that an individual can choose the new tax regime one year and then return to the old tax regime the next year, depending on their preferences and circumstances.

Income Tax Slabs in the New Regime

The following are the income tax slabs for FY 2023-24 (AY 2024-25) under the new tax regime, which will remain unchanged for FY 2024-25 according to the interim Budget 2024 proposals:

About the New Tax Slabs

Here’s what salaried individuals can expect from the new tax regime under Budget 2023 changes, which apply to fiscal years 2023-24 and 2024-25:
1) Reduced income tax slabs from six to five.
2) Increased the basic exemption limit to Rs 3 lakh from Rs 2.5 lakh, resulting in an additional Rs 50,000 benefit under the new tax regime.
3) Zero tax is payable on incomes up to Rs 7 lakh, thanks to an increase in the rebate under Section 87A.
4) Implementation of a standard deduction for salaried workers, pensioners, and family pensioners.
5) The new tax regime becomes the default one.
6) The surcharge on incomes exceeding Rs 5 crore will be reduced from 37% to 25%.
7) Provision of marginal tax relief for small taxpayers with incomes greater than Rs 7 lakh.

These changes are intended to streamline the tax structure and provide relief to salaried individuals.

Income Tax Slabs in the Old Regime

In the previous tax regime, the basic exemption limits varied depending on the individual’s age. Individuals under the age of 60 have a basic exemption limit of Rs 2.5 lakh. Senior citizens over the age of 60 but under the age of 80 have a higher basic exemption limit of Rs 3 lakh, whereas super senior citizens over the age of 80 have a basic exemption limit of Rs 5 lakh.

Here are the income tax slabs for FY 2023-24 (AY 2024-25) in the old tax regime, which apply to individuals under the age of 60, senior citizens, and super senior citizens. These income tax slabs will remain in effect for FY 2024-25 (AY 2025-26) as well.