New tax system and old tax system: Finance Minister Nirmala Sitharaman has announced in the interim budget of 2024 that there will be no modifications to the income tax slabs and rates. Therefore, the financial year 2024-25, beginning from April 1, 2024, will continue with the existing income tax slabs and rates.
New Delhi: If you’re employed, you’re probably accustomed to paying income taxes. The government introduced a new tax structure during the last budget session. Now, taxpayers must choose between the new and old tax structures.
Therefore, before opting for a tax regime for the financial year 2024-25, it’s important to understand the disparities in tax benefits between the two systems. Let’s delve into the comprehensive differences between the new and old tax structures.
New tax regime
✔️ According to the new tax slab, no tax is levied on annual income up to Rs 2.5 lakh. If your annual income falls between Rs 2.5 lakh and Rs 5 lakh, you will be required to pay a 5% income tax.
✔️ Additionally, if your annual income ranges from Rs 5 lakh to Rs 7.5 lakh, you must pay a 10% tax each year.
✔️ Similarly, if your salary is between Rs 7.5 lakh and Rs 10 lakh annually, you’ll need to pay a 15% income tax yearly.
✔️ Furthermore, if your annual income falls between Rs 10 lakh and Rs 12.5 lakh, you are liable to pay a 20% tax each year.
✔️ If you earn between Rs 12.5 lakh and Rs 15 lakh annually, you’ll be subjected to a 25% tax to be paid to the Income Tax Department.
✔️ Taxpayers with an annual income exceeding Rs 15 lakh will have to pay a 30% tax.
Old tax regime slab
✔️ As per the old tax regime slab, if your annual income falls between 0 and Rs 2.5 lakh, you are not liable to pay any taxes.
✔️ Similarly, individuals earning between Rs 2.5 lakh and Rs 5 lakh annually are exempt from any form of tax under the old tax system.
✔️ Those earning between Rs 2.5 lakh and Rs 5 lakh need to pay 5% of their income as tax.
✔️ Additionally, individuals with an annual income between Rs 5 lakh and Rs 10 lakh are required to pay a 20% income tax.
✔️ Furthermore, those with an annual income between Rs 10 lakh and Rs 30 lakh, and above, are subjected to a 30% annual tax.
Furthermore, speaking of senior citizens, some concessions have been provided to them in the income tax regime. Under the old tax regime, senior citizens aged between 60 and 80 years are exempt from paying any tax on income up to Rs 3,00,000.
