Amidst circulating misinformation on social media platforms, it is imperative to provide clarification regarding the new tax regime slated for implementation.
Firstly, it’s important to emphasize that there are no new changes taking effect from April 1, 2024. The Finance Act 2023 introduced the new tax regime under section 115BAC(1A), distinct from the existing old regime.
Under the new tax regime, applicable to individuals other than companies and firms, significantly lower tax rates are imposed. However, it’s crucial to note that various exemptions and deductions, except for standard deductions, are not available under this regime.
The new tax regime is set as the default for the Financial Year 2023-24, with the corresponding Assessment Year being 2024-25. Taxpayers have the liberty to opt for either the old or new regime, depending on what they deem advantageous. The option to opt out of the new tax regime is available until the filing of returns for the Assessment Year 2024-25.
Furthermore, eligible individuals without business income have the flexibility to choose their preferred regime for each financial year. This allows for alternating between the new and old tax regimes as per individual preferences and circumstances.
In conclusion, while misinformation may proliferate on social media, taxpayers need to be well-informed about the details and options regarding the new tax regime. Clarity on the subject ensures informed decision-making and compliance with tax regulations.
