The Finance Ministry on Monday issued a statement reaffirming that there will be no alterations to the new tax regime for the financial year 2024-25, which commences on April 1. The government in a 6-point note explained in response to misleading social media posts circulating on various platforms.

Interim budget highlights by Nirmala Sitharaman

During the presentation of the interim budget on February 1, 2024, Union Finance Minister Nirmala Sitharaman assured that there would be no alterations to taxation, proposing to maintain existing direct and indirect tax rates.

Key points from Finance Ministry

Responding to misinformation circulating on social media platforms, the Finance Ministry shared six important points for the financial year regarding taxes:

No new change: There will be no new change as of April 1, 2024.

Introduction of new tax regime: The new tax regime under Section 115BAC(1A) was introduced in the Finance Act 2023, differing from the existing old regime.

Applicability: The new tax regime is applicable for individuals other than companies and firms as the default regime from the Financial Year 2023–24, with the corresponding Assessment Year being AY 2024–25.

Lower tax rates: While the new tax regime offers significantly lower tax rates, it does not provide the benefit of various exemptions and deductions available in the old regime.

Option for taxpayers: Taxpayers can choose between the old and new tax regimes based on what they find beneficial.

Opt-out option: Taxpayers have the option to opt out of the new tax regime until filing their returns for AY 2024–25. Eligible individuals without business income can select the regime for each financial year as per their preference.

Interim budget tax slabs

As per the interim budget, the income tax slabs remain unchanged for the new financial year (FY2024–25). Income ranging from Rs. zero to Rs. 3,00,000 will be exempt from tax, with subsequent slabs taxed at 5%, 10%, 15%, 20%, and 30%, respectively.