The Ministry of Finance on Sunday clarified that there is no new change in the tax regime that is coming into effect from April 1. Just a day ahead of the interim budget's income tax proposals coming into effect, the finance ministry debunked the spread of misinformation concerning the new tax regime.
Late on Sunday, the Ministry of Finance shared a post on X (formerly Twitter), clearing the confusion over the new tax regime. In a detailed note, the ministry explained that the new tax regime has low rates but fewer exemptions and deductions.
The Ministry of Finance wrote, “It has come to notice that misleading information related to the new tax regime is being spread on some social media platforms. It is therefore clarified that: There is no new change which is coming in from 01.04.2024.”
The finance ministry shared a table explaining the income tax slabs as per the new tax regime. It added, “The new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023, as compared to the existing old regime (without exemptions) (SEE TABLE BELOW)”
Income from ₹0 to ₹3,00,000: 0 per cent tax rate
Income from ₹3,00,001 to ₹6,00,000: 5 per cent
Income from ₹6,00,001 to ₹9,00,000: 10 per cent
Income from ₹9,00,001 to ₹12,00,000: 15 per cent
Income from ₹12,00,001 to ₹15,00,001: 20 per cent
Income above ₹15,00,000: 30 per cent
In the old tax regime, the income tax slabs were:
Income from ₹0 to ₹2.5lakh: 0 per cent
Income from ₹ 2.5 - ₹ 5lakh: 5 per cent
Income from ₹ 5- ₹10 lakh: 20 per cent
Income above ₹ 10 lakh: 30 per cent
The note continued, “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 the family pension) is not available, as in the old regime.”
The finance ministry added, “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.”
Meanwhile, in January, people were alerted about "fake" news claiming that Finance Minister Nirmala Sitharaman will introduce a policy mandating three-day week-offs in all companies.
The Fact Check Unit (FCU) of the PIB shared a post on X (formerly Twitter) saying no such proposal has been put forth by the finance ministry.
It wrote, “An image circulating on social media claims that the Union Finance Minister Nirmala Sitharaman will announce a 3-day week off policy in the next #Budget. This claim is #fake...No such proposal has been floated by the Ministry of Finance.”
The interim budget for 2024-25 was announced by the Finance Minister on February 1. Read all about it here.