Budget 2024: New Income Tax Rates and Changes to Income Tax Return Dates

Introduction

The government has announced new income tax rates after Budget 2024, along with changes to the income tax return dates. In this blog, we will discuss the income tax slabs and rates for Assessment Year 2425 and Assessment Year 2526. Let's dive into the details without any delay.

Assessment Year 2425 and Assessment Year 2526

For both Assessment Year 2024-25 and Assessment Year 2025-26, the financial year will be 2023-24 and 2024-25 respectively. The slab rates for both years are the same, as no changes have been made to the income tax rates in Budget 2024. Let's discuss the slab rates and the new dates.

Income Tax Slab Rates

Under the old tax regime, if your income is up to INR 2,50,000, you are exempt from paying any tax. If your income is between INR 2,50,000 and INR 5,00,000, a tax rate of 5% is applicable. The difference between INR 5,00,000 and your income will be taxed at a rate of 5%.

For income between INR 5,00,000 and INR 10,00,000, a tax rate of 20% is applicable. For income above INR 10,00,000, the tax rate is 30%. These slab rates are applicable for individuals, whether they are residents or non-residents, and for HUFs as well as AOP and BOI.

Old Tax Regime Benefits

Under the old tax regime, if your income is up to INR 5,00,000, you are not liable to pay any tax. This is because the government provides a rebate under section 87A, which directly reduces the tax liability. The rebate amount is INR 12,500 for income up to INR 5,00,000. Additionally, deductions allowed under section 80 and 24 are applicable in the old regime.

New Tax Regime Benefits

Under the new tax regime, individuals can avail themselves of additional benefits. The standard deduction, which was previously not available, is now available for both salary and pension income. The standard deduction is INR 50,000 in both the old and new regimes. Additionally, the benefit of section 80C and NPS contributions is available in the new regime. The Agni Veer Corpus Fund benefit is also available in the new regime.

Marginal Relief

In the new tax regime, the government has introduced the concept of marginal relief. This means that the tax payable will be limited to the amount by which the income exceeds INR 7,00,000. The relief is calculated by subtracting INR 6,00,000 from the income. For example, if your income is INR 7,56,000, the excess income is INR 56,000. The tax on this excess income will be INR 5,600, and you will pay only INR 5,600 as tax.

Conclusion

In conclusion, the new income tax rates and changes to the income tax return dates have been announced after Budget 2024. You can choose between the old tax regime and the new tax regime based on your specific circumstances. We have discussed the slab rates and the benefits of both regimes in detail. If you have any doubts or queries, feel free to leave them in the comments section. Happy tax planning!

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