8 benefits for taxpayers in the new income tax regime for FY 2024-25 as shared by experts

The Budget 2023 has introduced a significant change in the income tax regime, defaulting to the new regime. This move aims to simplify tax filing and encourage more people to opt for the new regime, which offers lower tax rates but fewer deductions and exemptions. Taxpayers have the option to switch back to the old regime before the due date for filing their return.

The new income tax regime offers benefits such as lower tax rates, reduced tax liability, and increased disposable income for taxpayers. By eliminating various deductions and exemptions, it streamlines tax compliance, saving time and effort for taxpayers. Here are 8 advantages of the new tax regime:

1) Lower Tax Rates: Taxpayers can benefit from reduced tax liability and higher disposable income under the new regime with lower tax rates.
2) Simplified Tax Structure: The new regime offers a simplified tax structure with varying tax rates based on income levels.
3) No Tax Deductions: The new regime eliminates the need to track and claim deductions, saving time and effort for taxpayers.
4) Basic Exemption Limit: The basic exemption limit has been increased to ₹3 lakh under the new regime, making it more appealing to taxpayers.
5) Changes in the Surcharge Rate: The surcharge rate has been reduced from 37% to 25% for individuals with income exceeding ₹5 Crores under the new regime.
6) Change in the Rebate Limit: The rebate limit has been raised to ₹25,000 for taxable income up to ₹7 lakh under the new regime.
7) Standard Deduction: Salaried individuals can avail a standard deduction of ₹50,000 under both the old and new regime.
8) Exemption on Leave Encashment: Taxpayers will receive an exemption on leave encashment up to ₹25 lakhs at retirement under the new tax regime.

Taxpayers can benefit from these advantages by considering their tax liability and financial goals when choosing between the old and new income tax regimes.