The government clarified on Monday that there have been no new changes to income tax rules taking effect from April 1.
“This regime is applicable for persons other than companies and firms, as a default regime from the financial year 2023-24 and the assessment year corresponding to this is AY 2024-25,” said the statement.
It noted that under the new tax regime, the tax rates are “significantly lower”, but added that the benefit of various exemptions and deductions – other than the standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension – is not available like in the old tax regime.
“Although the new tax regime is the default tax regime, taxpayers can choose the tax regime that they think is beneficial to them,” read the finance ministry’s statement.
New vs old income tax
On the other hand, the new regime presents lower tax rates while removing the majority of deductions and exemptions. While it streamlines the filing process, it may not suit everyone's needs.
