Filing ITR for FY23-24: Check out the slab rates and deductions for old and new tax regimes

As the Income Tax filing deadline approaches on July 31, 2024, it's crucial for taxpayers to understand the intricacies of ITR filing, including income tax slab rates and deductions under both old and new tax regimes. With the right knowledge, you can optimse your tax returns and ensure compliance with the latest regulations. This article provides a comprehensive guide on income tax slab rates and deductions for both old and new tax regimes, helping you make informed decisions when filing your ITR.

Income Tax Return (ITR) filing is an essential annual task for all taxpayers. Whether you are an individual or part of a Hindu Undivided Family (HUF), understanding the different income tax slab rates and available deductions can significantly impact your tax liability. The Government of India introduced the new tax regime as an optional alternative to the old tax regime starting from the financial year 2020-21. This move aimed to provide more flexibility and choice in managing tax obligations.

In the Union Budget for the financial year 2023-24, Finance Minister Nirmala Sitharaman announced that the new tax structure would become the default regime. However, taxpayers can still opt for the old tax regime if it better suits their financial situation. Check out the key deadlines for different taxpayers

Income Tax Slab Rates for New Tax Regime

The new tax regime offers simpler slab rates without exemptions and deductions, making it easier for taxpayers to understand their tax liability. Here are the income tax slab rates under the new tax regime:

• Up to Rs 3 lakh: NIL
• Rs 3-6 lakh: 5% on income which exceeds Rs 3 lakh
• Rs 6-9 lakh: Rs 15,000 + 10% on income more than Rs 6 lakh
• Rs 9-12 lakh: Rs 45,000 + 15% on income more than Rs 9 lakh
• Rs 12-15 lakh: Rs 90,000 + 20% on income more than Rs 12 lakh
• Above Rs 15 lakh: Rs 1.5 lakh + 30% on income more than Rs 15 lakh

Income Tax Slab Rates for Old Tax Regime

The old tax regime includes various exemptions and deductions, allowing taxpayers to reduce their taxable income. The income tax slab rates under the old tax regime are as follows:

• Up to Rs 2.5 lakh: Nil
• Rs 2.5-5 lakh: 5% above Rs 2.5 lakh
• Rs 5-10 lakh: Rs 12,500 + 20% above Rs 5 lakh
• Above Rs 10 lakh: Rs 1,12,500 + 30% above Rs 10 lakh

Deductions and Exemptions Under the New Tax Regime

While the new tax regime does away with most exemptions and deductions, a few remain available to taxpayers. Some of the notable exemptions include:

• Transport Allowances for Persons with Disabilities (PwD)
• Conveyance Allowance
• Travel/Tour/Transfer Compensation
• Exemptions for Voluntary Retirement Scheme under Section 10(10C)
• Gratuity Amount under Section 10(10)
• Leave Encashment under Section 10(10AA)
• Deductions on Deposits in Agniveer Corpus Fund under Section 80CCH(2)

Also Read: Here's Why Salaried Individuals Should Wait Until June 15

Deductions and Exemptions Under the Old Tax Regime

The old tax regime offers numerous tax exemptions and deductions, allowing taxpayers to significantly reduce their taxable income. Commonly claimed exemptions and deductions include:

• House Rent Allowance (HRA)
• Leave Travel Allowance (LTA)
• Deductions under Sections 80C, 80D, 80CCD(1b), 80CCD(2), and others.

Choosing Between the Old and New Tax Regimes

When deciding between the old and new tax regimes, consider your financial situation, income levels, and available deductions. The new tax regime's simplified structure may benefit those with fewer deductions, while the old tax regime could be advantageous for those who can claim multiple exemptions and deductions.

Filing your ITR correctly and efficiently is crucial for staying compliant with tax laws and maximizing your savings. By understanding the differences between the old and new tax regimes, including their respective income tax slab rates and deductions, you can make an informed decision that best suits your financial needs. As the deadline approaches, ensure you review your options and choose the regime that offers the most benefits for your specific circumstances.

Also Read: Here's How You Can Download Form 16, 16A and 27D Online

Disclaimer:

The information in this article is intended for general informational purposes only and should not be considered as professional tax advice. Tax laws can vary based on individual circumstances and jurisdiction. For personalized guidance regarding your tax situation, it is recommended to consult with a qualified tax professional or financial advisor. We do not guarantee the accuracy or completeness of the information provided herein. Reliance on any information from this article is at your own risk.