No new tax regime changes applicable from 1, April 2024

The Ministry of Finance in an official statement has clarified that no new changes are to be followed from 1 April 2024.

No new tax regime changes applicable from 1, April 2024

The new tax regime under section 115 BAC(1A) was introduced in the Finance Act 2023, as compared to the existing old regime (without exemptions).

The 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 the standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension) is not available, as in the old regime.

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The new tax regime is the default tax regime, however, taxpayers 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 a new tax regime in one financial year and an old tax regime in another year and vice versa.

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