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| Old vs New Tax Regime FY 2023-24 |
1) Budget 2023 has made the new income tax regime as the default option for income taxpayers. Hence, unless an individual specifies that he/she is opting for the old income tax regime, then revised new income tax regime will be applicable. The change which has happened is from FY24, new tax regime will be the default option available to taxpayers. They may opt for old tax regime filing the tax return within due date.
2) An individual can switch between the new tax regime and the old tax regime in every financial year. Salaried taxpayers will continue to have option to switch every year.
3) However, the facility to switch between the new and old tax regimes is available only for those individuals having salaried income and does not have business income.Switching between old and new tax regime is restricted only for those with income from business or profession. They can switch in only once in lifetime.
4) The Union Budget 2023-24, which was presented by Finance Minister Nirmala Sitharaman in Parliament on February 1, has brought significant changes to personal income tax. The income tax rebate limit has been increased to ₹ 7 lakh.
5) In Budget 2020, taxpayers were given an option to either continue with the old tax regime, where tax exemptions could be claimed, or opt for the new regime with lower tax rate but no exemptions. In both the old and new tax regimes, however, the annual income up to which one did not need to pay taxes was ₹ 5 lakh. This has been changed in the Union Budget 2023-24.
6) The Finance Minister, in her budget speech, proposed to increase the tax-free ceiling in the new tax regime to ₹ 7 lakh from the existing ₹ 5 lakh. This means that those who have chosen the new tax regime and have an income of up to ₹ 7 lakh will not be required to pay any taxes.
7) The income tax slabs i.e (Old income tax regime ) have not been changed since 2014. Finance Minister Nirmala Sitharaman introduced a new income tax regime for the first time while presenting the Budget 2020.
Now, for the financial year 2023-24, the government has announced various steps to move towards a simpler tax regime which will help all taxpayers who opt for the new tax regime.
Disclaimer : This article is solely for educational purpose and cannot be construed as legal and professional opinion. It is based on the interpretation of the author and are not binding on any tax authority. Author is not responsible for any loss occurred to any person acting or refraining from acting as a result of any material in this article.