OLD VS NEW TAX RATES FOR FY 2023-24/ AY 2024-25

Understanding about tax regimes for the Financial Year 2023-2024/ Assessment Year 2024-2025.

Tax Slab rates Under both the regimes for Financial Year 2023-24.



OLD TAX REGIME



NEW TAX REGIME

TAX SLAB (IN Rs.)

TAX RATE


TAX SLAB (IN Rs.)

TAX RATE

0-250000

0%

0-300000

0%

250001-500000

5%

300001-600000

5%

500001-1000000

20%

600001-900000

10%

>1000000

30%

900001-1200000

15%

 

 

1200001-1500000

20%

 

 

>1500000

30%


Tax Rebate U/s.87A for the Financial Year 2023-24 under both the regimes.


TAX REBATE U/s.87A



OLD REGIME


NEW REGIME

AMOUNT OF REBATE

Rs.12,500 if total income does not exceed Rs.5,00,000.


Rs.25000 if total income does not exceed Rs.700,000

MARGINAL TAX REBATE


Not applicable

Applicable



What is the default tax regime while filing the returns for Financial Year 2023-24?



DEFAULT TAX REGIME



IF FILING BEFORE DUE DATE OF FILING i.e., 31.07.2024


IF FILING AFTER DUE DATE OF FILING i.e., 31.07.2024

DEFAULT REGIME


NEW TAX REGIME

NEW TAX REGIME

CHANGING TAX REGIME


ALLOWED

NOT ALLOWED



Marginal Relief under Section 87A For New Tax Regime

Under the new tax regime, the rebate is available for Rs. 25,000 if the income of the individual does not exceed Rs. 7 lakhs. However, if the income slightly increases by Rs. 7 lakhs then the individual will end up paying a higher amount of taxes. In such cases, they will be eligible to claim the benefit of marginal relief.

Marginal Rebate= tax payable - Income exceeding Rs.700,000(basic exemption limit)

Let us understand with an example.

Aditya is earning a total annual income of Rs. 7,15,000 for FY 2023-24 and he is opting for a new tax regime. His tax liability as per the tax rates available under the new regime will be Rs. 26,500. Here we can see that by a slight increase of Rs.15,000 in his income he is liable to pay the tax of Rs. 26,500.

Hence, in this case, he will be eligible to claim the relief as calculated below:

Marginal relief = Tax liability – Income over Rs. 7 lakhs
= 26,500 – 15,000
= 11,500

So, now he has to pay taxes Rs.15,000 (26500-11500) plus education cess and interest if any.


What deductions and exemptions are allowed under both the regimes?



Particulars

Old Tax Regime

New Tax Regime

Standard Deduction of Rs. 50,000

HRA

LTA

Food allowance

Professional Tax

Interest on home loan on Self-Occupied Property

Interest on home loan on Let-Out Property

Deduction U/s.80C

Employee’s OWN contribution to NPS

Employer’s Contribution to NPS

Deduction U/s.80D

Deduction U/s.80E

Deduction U/s.80G

Deduction U/s.80TTA/80TTB

Exemption on Gratuity U/s.10(10)

Exemption on Leave Encashment U/s. 10(10AA)



It is advisable to check which tax regime is beneficial before filing the income tax return for financial year 2023-24.

You can compare the tax liability under both the regimes using the following link. The following tax calculator is designed by Income Tax Department and hence authentic.

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