India's finance ministry clears confusion on new tax regime. Here's its six-point sum-up

India's finance ministry clarified that they won't introduce any new change in the tax regime from April 1, 2024, as the income tax proposals of the interim budget come into effect from April 1.

In a post on X, the finance ministry cleared all the confusion over the new tax regime. There are low rates in the new tax regime. However, it has fewer exemptions and deductions.

Union Finance Minister Nirmala Sitharaman, while presenting the interim budget on February 1, 2024, had said that no changes will be made to taxation. She further said that the ministry will retain the same direct and indirect tax rates.

Add WION as a Preferred Source

Also Read:WION Business Wrap | India’s direct tax collection rise, Airbus CEO's concern over Boeing and more

What did the finance ministry clarify on the new tax regime?

In a post on X, the finance ministry said, “It has come to notice that misleading information related to new tax regime is being spread on some social media platforms.”

Six points regarding the taxes were shared by the ministry for the financial year 2024-25.

In the post, the ministry said, "It is therefore clarified that:

• There is no new change which is coming in from 01.04.2024.
• The new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023, as compared to the existing old regime (without exemptions) (SEE TABLE BELOW)
• New tax regime is applicable for persons other than companies and firms, is applicable as a default regime from the Financial Year 2023-24 and the Assessment Year corresponding to this is AY 2024-25.
• Under the new tax regime, the tax rates are significantly lower, though the benefit of various exemptions and deductions (other than standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension) is not available, as in the old regime.
• New tax regime is the default tax regime, however, tax payers can choose the tax regime (old or new) that they think is beneficial to them.
• Option for opting out from the new tax regime is available till filing of return for the AY 2024-25. Eligible persons without any business income will have the option to choose the regime for each financial year. So, they can choose new tax regime in one financial year and old tax regime in another year and vice versa."

Watch:Congress gets tax notice triggering a sit-in protest in Kerala

According to the interim Budget, the government has also not changed the income tax slabs for the new financial year (FY2024-25).

(With inputs from agencies)