Union Budget 2024 reforms of the new tax regime may reduce tax burden and allow option to choose again

Jul 24, 2024 04:44 PM IST

Finance Minister Nirmala Sitharaman presented the Union Budget 2024 in the parliament on July 23, proposing new changes in the income tax slabs of the new tax regime.

What are the latest income tax slabs in the new tax regime?

Up to ₹3 lakh: NIL

₹3-7 lakh: 5%

₹7-10 lakh: 10%

₹10-12 lakh: 15%

₹12-15 lakh: 20%

₹15 lakh and above: 30%

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What were the tax slabs of the new tax regime previously?

Up to ₹3 lakh: NIL

₹3-6 lakh: 5% on income which exceeds ₹3 lakh

₹6-9 lakh: ₹15,000 + 10% on income more than ₹6 lakh

₹9-12 lakh: ₹45,000 + 15% on income more than ₹9 lakh

₹12-15 lakh: ₹90,000 + 20% on income more than ₹12 lakh

Above ₹15 lakh: ₹1.5 lakh + 30% on income more than ₹15 lakh

Also Read: Budget 2024: These 4 TDS changes announced by Nirmala Sitharaman will impact you

What are the tax slabs of the old tax regime?

Up to ₹2.5 lakh: Nil

₹2.4-5 lakh: 5% above ₹2.5 lakh

₹5-10 lakh: ₹12,500 + 20% above ₹5 lakh

Above ₹10 lakh: ₹1,12,500 + 30% above ₹10 lakh

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The new tax regime has been the default tax regime since April 1, 2023, but there is the option for employees to switch to the old regime by specifically informing the employer. This choice can only be made once a year and it would have already been done at the beginning of this financial year.

However, since the slabs have now been changed even for the new tax regime, there may be the option to choose again, for the purpose of Tax Deducted at Source (TDS) on the salary as the changes are effective from April 1, 2024 itself, according to an Economic Times report, which added that if that is the case, it is also an opportunity for those still under the old tax regime to switch to the new regime since the new regime has been made more and more attractive by the government in a move to increase the number of people who adopt it.

Those who already are opted for the new tax regime may also see decreasing taxes once the proposals are passed by the Parliament and receive President’s assent, the report read.