Finance Minister announced changes in individual income tax slab rates in July 2024 Budget speech. Let us look into the New Income Tax Slab Rates for FY 2024-25
Refer to a detailed post on the latest changes from July 2024 Budget “Budget 2024 – 10 BIG changes impacting personal finance” and also regarding the new capital gain taxation “Budget 2024 – New Capital Gain Tax Rules And Rates“
What is the difference between Gross Income and Total Income or Taxable Income?
Before jumping into what are the Latest Income Tax Slab Rates for FY 2024-25 / AY 2025-26 after Budget 2024? Are there any changes to applicable tax rates for individuals? Let us see the details., first, understand the difference between Gross Income and Total Income.
Many of us have the confusion of understanding what is Gross Income and what is Total Income or Taxable Income. Also, we calculate the income tax on Gross Income. This is completely wrong. The income tax will be chargeable on Total Income. Hence, it is very important to understand the difference.
Gross Total Income means total income under the heads of Salaries, Income from house property, Profits and gains of business or profession, Capital Gains, or income from other sources before making any deductions under Sections 80C to 80U.
Total Income or Taxable Income means Gross Total Income reduced by the amount permissible as deductions under Sec.80C to 80U.
Therefore your Total Income or Taxable Income will always be less than the Gross Total Income.
July 2024 Budget – New Income Tax Slab Rates FY 2024-25
There will be two types of tax slabs.
- For those who wish to claim IT Deductions and Exemptions.
- For those who DO NOT wish to claim IT Deductions and Exemptions.
Earlier, under the new tax regime, there were six income tax slab rates used to be there. But last year, it was reduced to five income tax slab rates. Do remember that the changes in income tax slab rates done last year apply only to the new tax regimes.
Also, earlier the standard deduction available for the salaried class and the pensioners including family pensioners is available only for the old tax regime. Last year, it was made to be available under the new tax regime.
Note that there is no change in the old tax regime. However, the slabs changed under the new tax slabs.
Earlier, the new tax regime was as below.
Up to Rs.3,00,000 – Nil
Rs.3,00,001 to Rs.6,00,000 – 5%
Rs.6,00,001 to Rs.9,00,000 – 10%
Rs.9,00,001 to Rs.12,00,000 – 15%
Rs.12,00,001 to Rs.15,00,000 – 20%
Rs.15,00,001 and above – 30%
Let me now share with you the revised New Income Tax Slab Rates For 2024-25.
Note that the standard deduction available for salaried under the old and new tax regime was earlier Rs.50,000. Now for the new tax regime, it is enhanced to Rs.75,000.
Read my full-fledged article on Budget 2024 soon..
