Indian Tax Slabs for Financial Year 2024
For the financial year 2024, the Indian government has introduced new tax slabs that offer individuals the flexibility to choose between the existing tax regime (with deductions) and a new simplified tax regime (without deductions). Let’s take a closer look at both:
Existing Tax Regime
In the existing tax regime, individuals can avail various deductions and exemptions while calculating their taxable income. The tax slabs for individuals below the age of 60 are as follows:
Income Slab | Tax Rate |
---|---|
Up to Rs. 2.5 lakh | Nil |
Rs. 2.5 lakh – Rs. 5 lakh | 5% |
Rs. 5 lakh – Rs. 10 lakh | 20% |
Above Rs. 10 lakh | 30% |
Additionally, individuals can claim deductions under various sections of the Income Tax Act, such as Section 80C, 80D, 80G, and more. These deductions help reduce the taxable income, thereby lowering the overall tax liability.
New Simplified Tax Regime
The new simplified tax regime introduced in 2020 offers lower tax rates but eliminates most deductions and exemptions. The tax slabs for individuals below the age of 60 in the new regime are as follows:
Income Slab | Tax Rate |
---|---|
Up to Rs. 2.5 lakh | Nil |
Rs. 2.5 lakh – Rs. 5 lakh | 5% |
Rs. 5 lakh – Rs. 7.5 lakh | 10% |
Rs. 7.5 lakh – Rs. 10 lakh | 15% |
Rs. 10 lakh – Rs. 12.5 lakh | 20% |
Rs. 12.5 lakh – Rs. 15 lakh | 25% |
Above Rs. 15 lakh | 30% |
It’s important to note that individuals opting for the new regime cannot claim deductions under various sections of the Income Tax Act.
Deductions for Income Tax Benefits
While the new simplified tax regime eliminates most deductions, the existing tax regime still allows individuals to claim deductions to lower their taxable income. Here are some key deductions to consider:
Section 80C
Under Section 80C, individuals can claim deductions up to Rs. 1.5 lakh for investments in specified instruments such as Employee Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificate (NSC), and more.
Section 80D
Section 80D allows individuals to claim deductions on health insurance premiums paid for themselves, their spouse, children, and parents. The maximum deduction varies based on the age of the insured and the number of family members covered.
Section 80G
Contributions made to specified charitable organizations and funds are eligible for deductions under Section 80G. The deduction amount varies depending on the type of organization and the percentage of contribution.
Section 24(b)
Individuals can claim deductions on the interest paid on home loans under Section 24(b). The maximum deduction allowed is Rs. 2 lakh for self-occupied properties.
These are just a few examples of the deductions available under the existing tax regime. It’s crucial to consult a tax expert or refer to the Income Tax Act for a comprehensive list of deductions and the eligibility criteria for each.
SUMMARY:
By staying informed and utilizing the available tax benefits, you can effectively manage your finances and contribute to your long-term financial well-being.
Thanks for detailed information about tax slabs and deductions.
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