The Ministry of Finance has issued a statement refuting claims of any changes to the new income tax regime for individuals, effective April 1, in the current fiscal year. The clarification comes amidst speculation on social media regarding alterations to the taxation system.
Contrary to rumors circulating on social media, the ministry affirmed that there are no new changes forthcoming in the tax regime from April 1, 2024. The existing modified income tax regime, implemented from the financial year beginning April 1, 2023, remains unchanged.
Under this regime, individuals benefit from significantly lower tax rates, although various exemptions and deductions, except for standard deductions, are not applicable.
The ministry emphasized that the new tax regime operates as the default tax system. However, individual taxpayers retain the option to choose between the old and new tax regimes based on their perceived benefits. Taxpayers can exercise this option until the filing of returns for the Assessment Year 2024-25. Under the new income tax regime, income up to ₹3 lakh is exempt from tax, with a progressive tax rate ranging from 5% to 30% for different income slabs.
Eligible individuals, particularly those without business income, have the flexibility to select the tax regime for each financial year. This enables taxpayers to alternate between the new and old tax regimes, depending on their financial circumstances.
While the old tax regime continues to be in force, providing deductions and exemptions, it exempts income up to ₹2.5 lakh from taxes, with a progressive tax rate structure for different income brackets.
The ministry’s clarification aims to dispel misinformation and ensure taxpayers are informed about the prevailing tax regulations and options available to them.
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