Understanding New and Old Income Tax Slabs Under the Union Budget 2024-2025

The Union Budget 2024 has brought significant changes to the Indian tax landscape, particularly concerning the income tax slabs. Whether you are an Indian resident or a non-resident, it is essential to understand the different tax slabs under the old and new tax regimes. This article delves into the details, comparing the changes and providing insights on how these changes can benefit taxpayers.

The Old Tax Regime

The old tax regime, which was prevalent prior to the introduction of the new tax regime under the Union Budget 2024, had different categories based on age and residence status. Here’s a breakdown of the slabs:

Indian Residents (Aged 60 and Above)

Up to 3 lakh: Nil 3 lakh - 6 lakh: 5% 6 lakh - 9 lakh: 10% 9 lakh - 12 lakh: 15% 12 lakh - 15 lakh: 20% More than 15 lakh: 30%

All Non-Residents

Up to 3 lakh: Nil 3 lakh - 6 lakh: 5% 6 lakh - 9 lakh: 10% 9 lakh - 12 lakh: 15% 12 lakh - 15 lakh: 20% More than 15 lakh: 30%

Resident Senior Citizens (Aged 60-80)

Up to 3 lakh: Nil 3 lakh - 6 lakh: 5% 6 lakh - 12 lakh: 10% 12 lakh - 20 lakh: 15% More than 20 lakh: 30%

Resident Super Senior Citizens (Aged Above 80)

Up to 3 lakh: Nil 3 lakh - 6 lakh: 5% 6 lakh - 12 lakh: 10% 12 lakh - 20 lakh: 15% More than 20 lakh: 30%

The New Tax Regime

The new tax regime, introduced with the Union Budget 2024, offers a more simplified tax structure with fewer slab rates. Here’s a detailed comparison of the new tax slabs:

Income up to 3 lakh

No tax

Income from 3 lakh to 6 lakh

5%

Income from 6 lakh to 12 lakh

10%

Income from 12 lakh to 20 lakh

15%

Income from 20 lakh to 35 lakh

20%

Income above 35 lakh

30%

Revised Slabs and Savings

The new tax regime has brought several benefits to taxpayers. For the fiscal year 2024-2025, the standard deduction has been increased to Rs. 75,000 from Rs. 70,000, providing a tax relief of Rs. 5,000. Additionally, the family pension deduction has been further increased to Rs. 25,000 from Rs. 15,000, adding an extra Rs. 10,000 in tax savings. This means taxpayers can save an additional Rs. 17,500, making the new tax regime particularly appealing.

Comparison and Choosing the Right Regime

While the new tax regime offers lower rates, it is important to consider your financial situation and deductions before making a choice. Here’s a brief comparison:

New Regime: Lower rates but fewer deductions, making it more straightforward and beneficial for salaried individuals with basic expenses. Old Regime: Higher rates but offers significant deductions such as home loans and investments, making it more advantageous for individuals with substantial tax deductions.

The right choice depends on your income level, financial situation, and the number of deductions you can claim. It is always advisable to consult with a tax expert to make an informed decision.

Conclusion

The Union Budget 2024 has brought both simplification and flexibility to the tax structure. Whether you choose the new or old regime, it is crucial to understand the implications and benefits. By keeping up to date with these changes, you can ensure better tax planning and maximize your savings.

Source and Image Credits

The detailed slabs and illustrations used in this article are sourced from official government documents and are subject to the respective copyright laws. For detailed information and imagery, please refer to the original sources.