New income tax vs. old income tax slabs: Finance Minister Nirmala Sitharaman presented the Narendra Modi 3.0 government’s first budget on July 23. In sops for the middle class, FM hiked the standard deduction by 50 per cent to ₹75,000 and tweaked tax slabs under the new income tax regime to provide more money for the salaried class. The new tax slabs under the new income tax regime will be effective from April 1, 2024 (Assessment Year 2025-26).
Sitharaman said income of up to ₹3 lakh will continue to be exempted from income tax under the new regime.
As per the proposal, a 5 per cent tax will be levied on income between ₹3-7 lakh, 10 per cent between ₹7-10 lakh, 15 per cent for ₹10-12 lakh.
However, 20 per cent tax will continue to be levied on income between ₹12-15 lakh and 30 per cent for income above ₹15 lakh.
Under the existing new I-T regime, a 5 per cent tax is levied on income between ₹3-6 lakh, 10 per cent for income between ₹6-9 lakh.
Income between ₹9-12 lakh and ₹12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively. A 30 per cent I-T would be applicable on income above ₹15 lakh.
However there were no changes announced for the old income tax regime
1) Income up to ₹2.5 is exempt from taxation under the old tax regime.
2) Income between ₹2.5 to ₹5 lakh is taxed at 5 per cent under the old tax regime.
3) Personal income from ₹5 lakh to ₹10 lakh is taxed at a rate of 20 per cent in the old regime
4) Under the old regime, personal income above ₹10 lakh is taxed at a rate of 30 per cent.
