New Income Tax Changes of 2024

Modifications in the Income Tax Slabs

According to the announcement made under the budget, the revised tax slab applies to the new tax regime. The corresponding changes from April 1, 2024, are highlighted below.

Changes in the Surcharge Rate

The implementation of the new tax regime leads to a reduction in the surcharge rate from 37% to 25%. This is applicable for individuals with income exceeding Rs.5 Crores.

This reduced surcharge rate is valid only for those taxpayers who choose the new tax regime and have an income exceeding Rs.5 Crores.

The following table shows the updated surcharge rate according to the new tax regime:

Change in the Rebate Limit

The introduction of the new tax regime has increased the rebate limit. As per the old tax regime, the applicable rebate limit is Rs. 12,500 for incomes up to Rs.5 lakhs. However, under the new tax regime, this rebate limit has increased to Rs. 25,000 if the taxable income is less than or equal to Rs.7 lakhs. Note that the Section 87A rebate is applicable under both income tax regimes. Then, the budget announcement increased the taxable limit to Rs.7 lakhs from Rs.5 lakhs under the new tax regime.

Standard Deduction

Salaried individuals’ standard deduction under both the old and the new regime is Rs. 50,000.

Other Deductions newly added under the new regime:

• Deduction from family pension income of Rs. 15,000 or 1/3rd of the pension (whichever is lower).
• Deduction of the amount paid or deposited in the Agniveer Corpus Fund under Section 80CCH (2).