Earnings Tax Guidelines FY 2024-25: Earnings Tax Guidelines FY 2024-25: New vs outdated tax regime – 6 guidelines salaried people ought to know | Enterprise

Earnings tax guidelines for FY 2024-25: Because the monetary 12 months 2024-25 has begun on April 1, you will need to concentrate on earnings tax guidelines. Even when adjustments are introduced within the Union Finances or in the course of the 12 months, they normally take impact from the beginning of the brand new monetary 12 months. This 12 months, there have been no adjustments introduced for FY 2024-25 within the interim funds, so the earnings tax guidelines from the earlier 12 months stay unchanged.
Listed here are the six earnings tax guidelines that can apply from April 1, 2024:

1. Selecting between outdated and new earnings tax regimes

For TDS (tax deducted at supply) on wage, workers should choose between the outdated and new tax regimes, states an ET report.The default choice is the brand new tax regime. For those who do not inform your employer about choosing the outdated tax regime, they are going to deduct tax primarily based on the brand new regime out of your wage. Make sure that to do that promptly when requested by your employer.

2. Fundamental exemption limits

There is a distinction within the primary exemption restrict between the outdated and new tax regimes. If a person’s earnings does not exceed this restrict in a monetary 12 months, they do not need to pay tax. At present, beneath the brand new tax regime, earnings as much as Rs 3 lakh is tax-exempt for all people, no matter age. Within the outdated tax regime, the exemption restrict varies with age. For people under 60 years, Rs 2.5 lakh is exempt from tax, for seniors aged 60 to 80 years, it is Rs 3 lakh, and for tremendous senior residents aged 80 years and above, it is Rs 5 lakh.
Earnings tax slabs beneath new tax regime

Earnings tax slabs beneath outdated tax regime

3. Tax rebates

Earnings tax legal guidelines present a tax rebate to resident people in each tax regimes. This rebate, obtainable beneath Part 87A, does away with the necessity to pay tax if the online taxable earnings stays under a sure restrict.
The brand new tax regime gives a better rebate in comparison with the outdated one. Beneath the brand new regime, people can get a rebate of as much as Rs 25,000, making incomes as much as Rs 7 lakh tax-free. In distinction, the outdated tax regime gives a rebate of as much as Rs 12,500, making incomes as much as Rs 5 lakh tax-free.

4. Deductions and exemptions: New vs outdated regime

Each tax regimes present deductions and exemptions, however the outdated regime gives extra. Examples of deductions and exemptions obtainable beneath the outdated tax regime embrace commonplace deduction, Part 80C for investments and bills as much as Rs 1.5 lakh, Part 80D for medical insurance premiums, and Part 80CCD (1B) for extra NPS funding as much as Rs 50,000. Moreover, deductions will be claimed for house mortgage curiosity as much as Rs 2 lakh, schooling mortgage curiosity, and charitable donations. Furthermore, people may declare exemptions for home hire allowance (HRA) and go away journey allowance (LTA).
The brand new tax regime gives solely two deductions for people. These embrace an ordinary deduction of Rs 50,000 from wage and pension earnings, and a deduction beneath Part 80CCD (2) for the employer’s contribution to the NPS account. Household pensioners are additionally eligible for the standard deduction of Rs 15,000 beneath the brand new tax regime. It is value noting that these deductions are additionally obtainable beneath the outdated tax regime.
Claiming eligible deductions, relying on the chosen tax regime, permits people to lower their internet taxable earnings and tax legal responsibility.

5. Submitting Earnings Tax Returns (ITR)

For those who intend to decide on the outdated tax regime when submitting your earnings tax return this 12 months, be sure to file your ITR earlier than the July 31 deadline. That is essential as a result of the brand new tax regime is the default choice, and earnings tax guidelines allow people to pick the outdated tax regime provided that their ITR is filed on time. For those who file a belated ITR between August 1 and December 31, your tax legal responsibility might be calculated primarily based solely on the brand new tax regime.

6. Surcharge charges

A high-income earner selecting the brand new tax regime will face a decrease surcharge price. For incomes exceeding Rs 5 crore, the speed has been decreased from 37% to 25% beneath the brand new tax regime. Nonetheless, if the person selects the outdated tax regime, a surcharge price of 37% will apply.