New tax regime clarified, no changes on horizon: Finance ministry debunks falsehoods

NEW DELHI: In response to widespread misinformation circulating on various social media platforms, the Ministry of Finance issued a clarification regarding the applicability of the new tax regime versus the existing one.

The statement, posted on X, addressed misconceptions surrounding changes purportedly taking effect from April 1, 2024.

The Ministry of Finance posted on X, “It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that: There is no new change which is coming in from 01.04.2024…..”

It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that:

There is no new change which is coming in from 01.04.2024.

The new tax regime under section 115BAC(1A) was… pic.twitter.com/DtKGkK0D5H

— Ministry of Finance (@FinMinIndia) March 31, 2024

The ministry categorically stated that there are no new alterations slated for implementation on April 1, 2024. Instead, it underscored that the new tax regime under section 115BAC(1A) was introduced in the Finance Act 2023.

This regime, as compared to the existing one, presents different tax brackets and provisions. The new tax regime, denoted under section 115BAC(1A), is applicable for individuals other than companies and firms. It serves as the default regime starting from the financial year 2023-24, with the corresponding assessment year being AY 2024-25.

Under the new tax regime, tax rates are notably lower than those in the existing regime. However, it’s important to note that various exemptions and deductions, excluding the standard deduction of Rs 50,000 from salary and Rs 15,000 from family pension, are not available.

Taxpayers retain the autonomy to select the tax regime they deem most advantageous to their financial situation. They can opt for either the old or new tax regime. This flexibility allows individuals to make informed decisions based on their specific circumstances.

Importantly, individuals have the option to opt out from the new tax regime until the filing of returns for the assessment year 2024-25. Furthermore, eligible persons without any business income can choose the regime for each financial year, alternating between the new and old regimes as per their discretion.

The clarification aims to dispel misinformation and provide clarity to taxpayers regarding the prevailing tax regulations. The ministry emphasized the importance of accurate information dissemination, particularly in matters concerning taxation policies that directly impact citizens’ financial affairs.

The ministry urged individuals to rely on official announcements and sources for accurate information regarding tax reforms and regulatory changes. It reiterated its commitment to ensuring transparency and accessibility in matters concerning fiscal policies, thereby fostering informed decision-making among taxpayers. (ANI)