Beware of rumours! The ministry gave information on the tax related rules changing from today, know what will be the changes
The Finance Ministry has issued a clarification amid the spread of misleading information on social media platforms regarding the new tax system. It has been emphasized that no new changes will be effective from April 1, 2024. Taxpayers have the freedom to choose between the old and new tax regimes depending on their preferences and financial circumstances. There is also an option to opt out of the new arrangement until you file your application.
On social media platforms, the Finance Ministry posted that it has been observed that misleading information related to the new tax regime is being spread on some social media platforms. Therefore it is clarified that
- There is no new change here which is coming from 04.2024.
- The new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023 as compared to the existing old regime (without exemptions).
- The new tax regime is applicable for individuals other than companies and firms, with effect as default regime from FY 2023-24 and corresponding assessment year AY 2024-25.
- Under the new tax regime, tax rates are significantly lower, although the benefit of various exemptions and deductions (other than the standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension) is not available as in the old one.
- The new tax regime is the default tax regime, however, taxpayers can choose the tax regime (old or new) that they feel is beneficial to them.
- The option to opt out of the new tax regime is available till the filing of return for assessment year 2024-25. Eligible individuals without any business income will have the option to choose the arrangement for each financial year. Therefore, they can choose the new tax regime in one financial year and the old tax regime in the other year.
