Tax Regime Changes in India for FY 2023-24

New Tax Regime Now Default Option

Summary

The Indian government has made significant changes to its tax regime for the upcoming financial year (FY) 2023-24. The new tax regime, which was introduced in 2020-21 as an optional choice, has now become the default option for taxpayers. Taxpayers can still choose to file their returns under the old tax regime but will have to forego certain deductions and exemptions.

Key Highlights:

• New tax regime becomes default option from FY 2023-24.
• Taxpayers have to specifically opt for the old tax regime to claim deductions.
• New tax regime offers lower tax rates but fewer deductions compared to the old regime.
• Basic exemption limit increased to Rs. 3 lakh under the new tax regime.
• Tax rate structure revised for the new tax regime, with progressive rates ranging from 0% to 30%.

The government aims to simplify the tax system and encourage taxpayers to opt for the new tax regime. However, taxpayers are advised to carefully consider their financial situation and choose the tax regime that best suits their individual circumstances.