New Tax Regime: FM Nirmala Sitharaman clears doubts!

In a world where misinformation and fake news spread faster than fire, the internet was filled with doubts over the tax regime as many internet users took to the internet to ask questions with the nation entering interim budget's income tax proposals that are starting today. Following the concerns and doubts over the New Tax Regime, Finance Minister, Nirmala Sitharaman took to X, formerly, Twitter to clarify the doubts. 

Ms. Sitharaman, who presented the interim budget on February 1, 2024, said, "It has come to notice that misleading information related to the new tax regime is being spread on some social media platforms." Along with this, the Union Minister shared the 6 key points to resolve the doubts that you must know.

A quick look at the new tax regime

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• There is no change coming in from 01.04.2024.
• The new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023, as compared to the existing old regime (without exemptions). 
• New tax regime is applicable for persons other than companies and firms, is applicable as a default regime from the Financial Year 2023-24 and the Assessment Year corresponding to this is AY 2024-25.
• Under the new tax regime, the tax rates are significantly lower, though the benefit of various exemptions and deductions (other than standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension) is not available, as in the old regime.
• New tax regime is the default tax regime, however, tax payers can choose the tax regime (old or new) that they think is beneficial to them.
• Option for opting out from the new tax regime is available till filing of return for the AY 2024-25. Eligible persons without any business income will have the option to choose the regime for each financial year. So, they can choose new tax regime in one financial year and old tax regime in another year and vice versa.

According to the interim Budget, income tax slabs for the new financial year (FY2024-25) have remained unchanged. Income from Rs zero to Rs 3,00,000 will be exempted from tax, while the income slab from Rs 3,00,001 to Rs 6,00,000 will be taxed at 5 percent, Rs 6,00,001 to Rs 9,00,000 at 10 percent, Rs 9,00,001 to Rs 12,00,000 at 15 percent, Rs 12,00,001 to Rs 15,00,000 at 20 percent, and Rs 15,00,000 and above at 30 percent