Union Finance Minister Nirmala Sitharaman in her last Budget (2022-23) speech had announced that while the new tax regime would be the default, taxpayers could opt for the old one. Sitharaman had proposed to raise the rebate limit from Rs 5 lakh to Rs 7 lakh in the new tax regime. Therefore, if an individual has opted for the new tax regime, he or she will not be required to pay any tax up to an annual income of Rs 7 lakh.

The revised tax slab applies to the new tax regime. Here are the updated income tax rates:

Total Income:

Up to ₹3,00,000: 0%

₹3,00,001 to ₹6,00,000: 5%

₹6,00,001 to ₹9,00,000: 10%

₹9,00,001 to ₹12,00,000: 15%

₹12,00,001 to ₹15,00,000: 20%

Above ₹15,00,000: 30%

Advantages of the New Tax Regime:

The implementation of the new tax regime offers several benefits for taxpayers:

Simplified Tax Planning:

• Taxpayers no longer need to maintain a track record of travel tickets and rent receipts.
• The changes aim to simplify tax planning.

Increased Basic Exemption Limit:

• The basic exemption limit has been elevated from ₹2.5 lakhs to ₹3 lakhs.
• This makes the novel tax regime more appealing.

Surcharge Rate Reduction:

• The surcharge rate for individuals with income exceeding ₹5 Crores has decreased from 37% to 25%.
• This reduced surcharge rate applies only to those who choose the new tax regime.

Rebate Limit Enhancement:

• Under the new tax regime, the rebate limit has increased.
  For incomes up to ₹7 lakhs, the applicable rebate limit is now ₹25,000.

Unchanged Income Tax slabs

Union Finance Minister Nirmala Sitharaman, while presenting the interim Budgeton February 1, 2024, said that there would be no changes to taxation and proposed to retain the same direct and indirect tax rates, including import duties. The Union Finance Minister further stated that the average time for refunds has been reduced from 93 days in 2013-2014 to just 10 days in the last year. She added that the average real income of people has increased by 50%.