New Tax Rules From April 1: Old vs New Tax Regime - Know The Difference

Photo Credit: Source: Vectorjuice on Freepik New Income Tax rules will kick in from April 1, still confused which tax regime to opt for from FY 2023-24? Aishwarya Rajgopal Updated On 07:46 AM IST, 24 Mar 2023

Default Tax Regime

From FY 2023-24, the new tax regime will now be the default option for all taxpayers. Taxpayers who wish to opt for the old tax regime must now indicate this preference. Photo Credit: (Source: Pixabay) [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

Changes In Budget 2023

In the Union Budget 2023, Finance Minister Nirmala Sitharaman announced major tweaks to the new tax regime. These changes will be effective from FY 2023-2024. Photo Credit: Nirmala Sitharaman, India's finance minister, center, and other members of the finance ministry leave the ministry to present the budget at the parliament in New Delhi, India, on Wednesday, Feb. 1, 2023. Sitharaman will announce the last full-year budget before Prime Minister Narendra Modi seeks a third term in elections due in the summer of 2024. [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

Old Tax Regime vs New Tax Regime

Photo Credit: Source: starline on Freepik [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

Old Tax Regime - Income Tax Slabs

Up to ₹2,50,000- Nil ₹2,50,001-₹5,00,000- 5% ₹5,00,001-₹10,00,000- 20% Above ₹10,00,000- 30% [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

Old Income Tax Regime

The income tax rates in the old regime may seem high. However, this tax regime also offers over 70 tax exemptions and deduction options to bring down your tax liability. Photo Credit: (Photo: iStock) [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

Old Income Tax Regime - Exemptions

Some common income tax exemptions and deductions under the old tax regime are House Rent Allowance (HRA), Leave Travel Allowance (LTA), investments in EPF, PPF, ELSS, ULIPs, tax-saving FDs, life and health insurance, etc. Photo Credit: Source: Drazen Zigic on Freepik [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

New Tax Regime - Income Tax Slabs

Up to ₹3,00,000- Nil ₹3,00,001-₹6,00,000- 5% ₹6,00,001-₹9,00,000- 10% ₹9,00,001-₹12,00,000- 15% ₹12,00,001-₹15,00,000- 20% Above ₹15,00,000- 30% Photo Credit: Source: jcomp on Freepik [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

New Income Tax Regime

As per the latest announcement in Union Budget 2023, the income tax slabs in the new regime are applicable for taxpayers with a taxable income above ₹7 Lakh. Photo Credit: Source: Twitter @FinMinIndia [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]

New Income Tax Regime - No Exemptions

While the lower tax rates may seem attractive, the new tax regime does not offer any tax exemptions and tax deductions available under the old regime. Photo Credit: Source: Snowing on Freepik [{ "selector": ".story-desp_p", "duration": "1.2s", "easing": "ease-in-out", "keyframes": [{ "opacity": 0 }, { "opacity": 1 }, { "opacity": 1 } ] }, { "selector": ".substory_h1", "duration": "0.75s", "easing": "linear", "keyframes": [{ "transform": "translateY(40px)", "opacity": 0 }, { "transform": "translateY(0px)", "opacity": 1 }, { "transform": "translateX(0)", "opacity": 1 } ] } ]