Finance Minister Nirmala Sitharaman had said in the Union Budget 2024 that people with an annual income of up to Rs 12 lakh will not have to pay tax. But, the thing to keep in mind is that this rule is for people using the new regime of income tax.
The new financial year is about to start. Many income tax rules are going to change from April 1. In the budget presented on July 23, 2024, Finance Minister Nirmala Sitharaman announced major changes in the new income tax regime. These changes are going to be implemented from April 1. If you do a job, then it is more important for you to know about these changes. This will affect your tax liability. Let us know about this in detail.
Employer will start deducting TDS from April salary
If you are employed, then in April your employer (company) will send you an email asking whether you want to use the new or old Income Tax regime. After you tell him this, he will start deducting tax (TDS) from your salary. Therefore, it is important for you to know which of the new and old Income Tax regimes is beneficial for you. You can take the help of a tax consultant in this regard.
No tax on income up to Rs 12 lakh per annum
Finance Minister Nirmala Sitharaman had said in the Union Budget 2024 that people with an annual income of up to Rs 12 lakh will not have to pay tax. But, the thing to keep in mind is that this rule is for people using the new income tax regime. Therefore, it is important for taxpayers, especially working people, to know now whether the new income tax regime will be beneficial for them after the exemption rule for income up to Rs 12 lakh.
New income tax rules are going to be implemented from April 1
The government is trying to increase the use of the new income tax regime. Therefore, in the last few years, there has been a constant effort to make this regime attractive. In the Union Budget presented in July, the government had announced a change in the tax slab of the new regime along with giving tax exemption to income up to Rs 12 lakh. These rules are going to be implemented from April 1, 2025. Your tax-saving investment will also depend on which regime you are going to use in the financial year starting from April 1, 2025.
Most deductions are not available in the new regime
The old income tax regime is now beneficial only for those who have taken a home loan or claim HRA. If you do not have a job, then the option of HRA is also not for you. In the old income tax regime, many types of deductions are available including deduction on home loan. Among these, the deduction available under section 80C is the most prominent. About a dozen investment options come under this section. You can claim deduction by investing in them. Also, deduction is also available on health policy under section 80D.
Benefits of the old income tax regime
Most deductions are not available in the new income tax regime. But the tax rates in it are low. After making income up to Rs. 12 lakh tax free, the attraction of this regime has increased a lot. This regime is very beneficial for those who do not make any kind of tax-saving investment. The calculation of tax in this is very easy. Therefore, if you do not make tax-saving investments, then this regime will be beneficial for you.
