Here are 7 key income tax rules that salaried individuals should be aware of as the financial year 2024-25 commences on April 1, 2024:
1. Choosing Tax Regimes: Employees must decide between the old and new tax regimes for TDS on salary. Failure to communicate this choice to the employer will result in tax deduction based on the new regime by default.
2. Basic Exemption Limits: The basic exemption limit differs between the old and new tax regimes. Currently, under the new regime, income up to Rs 3 lakh is exempt from tax for all individuals. In the old regime, the limit varies based on the individual’s age.
Income Tax Slabs:
- Under the New Regime:
- Income up to Rs 3,00,000: 0%
- Income from Rs 3,00,001 to Rs 6,00,000: 5%
- Income from Rs 6,00,001 to Rs 9,00,000: 10%
- Income from Rs 9,00,001 to Rs 12,00,000: 15%
- Income from Rs 12,00,001 to Rs 15,00,000: 20%
- Income above Rs 15,00,000: 30%
- Under the Old Regime:
- Income up to Rs 2,50,000: 0%
- Income from Rs 2,50,001 to Rs 5,00,000: 5%
- Income from Rs 5,00,001 to Rs 10,00,000: 20%
- Income above Rs 10,00,000: 30%
3. Zero Tax Payable: Both tax regimes offer tax rebate under Section 87A, resulting in zero tax payable if the net taxable income does not exceed a specified limit. The new regime provides a higher tax rebate compared to the old regime.
4. Deductions and Exemptions: While both regimes offer deductions and exemptions, the old regime provides more options including Section 80C, 80D, 80CCD (1B), home loan interest, education loan interest, and donations. The new regime has fewer deductions, including a standard deduction of Rs 50,000 and Section 80CCD (2) deduction for NPS contributions.
5. Filing ITR on Time: To opt for the old tax regime while filing the income tax return, it should be filed before the July 31 deadline. Opting for the old regime is only possible if the ITR is filed on time.
6. Reduced Surcharge: High-income earners choosing the new regime will have a reduced surcharge rate of 25% for incomes exceeding Rs 5 crore. Opting for the old regime will result in a 37% surcharge rate.
7. ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal
Excel Utilities of ITR-1, ITR-2 and ITR-4 for AY 2024-25 are available for filing. Click here to download.
Offline Utilities for ITR-1, ITR-2, ITR-4 and ITR 6 for AY 2024-25 are available for filing. Click here to download.
Income Tax Return Form of ITR-1, 2 and 4 are enabled to file through Online mode with prefilled data at the portal.