The Finance Ministry has issued a statement refuting claims circulating on certain social media platforms regarding an imminent change in the income tax regime slated for April 1, 2024.
In a clarification posted on X on Sunday, the Ministry emphasized, "It has come to notice that misleading information related to the new tax regime is being spread on some social media platforms. It is therefore clarified that: There is no new change which is coming in from April 1, 2024."
Introduced in the Finance Act 2023, the new tax regime under Section 115BAC(1A) stands distinct from the previous regime, devoid of exemptions.
According to the Finance Ministry, the new tax structure applies to individuals and entities other than companies and firms by default, effective from the Financial Year 2023-24, with the corresponding Assessment Year being AY 2024-25.
While the new regime boasts significantly lower tax rates, it does away with various exemptions and deductions, excluding the standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension, available under the old regime.
Though the default option is the new tax regime, taxpayers retain the freedom to opt for either the old or new regime based on their perceived advantages.
The opportunity to opt out from the new tax structure remains open until the filing of returns for the AY 2024-25.
Individuals eligible without any business income can exercise the choice to select the tax regime for each financial year, affording them the flexibility to alternate between the new and old tax frameworks as deemed beneficial, as stated by the Finance Ministry.
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