FINANCE Act 2024 IMPORTANT points,taxpayers to Note:-

FINANCE Act 2024

 IMPORTANT points,taxpayers to Note:-

1)NEW TAX REGIME ( NTR) offer a lower rate of tax structure but excludes various deductions and exemptions.

2) After 3 years of its introduction,NTR has now become attractive, lucrative.

3)Basic exemption limit Under NTR is 3 lakhs for all, where as it is 2.5 lakhs for non senior citizens.

4) Tax bracket of of 5% in NTR is now extended upto 7 lakhs from earlier 6 lakhs.No such change seen in OLD TAX REGIME ( OTR).

5) 5% tax slab under OTR is only for income between Rs 2.5 lakhs to 5 lakhs where as it is for income between 3 to 7 lacs under NTR .

6)As a result of above,tax out go for the person under NTR will be reduced vis a vis for person opting for OTR.

7)Tax rebate under sec.87A:-Under OTR this rebate is not available if the income exceeds 5 lacs.However under NTR,this rebate is available if the income doesn't exceed 7.5 lacs.( Upto 7.5 lacs)

8) In nut shell, taxpayer with normal income upto 7 lacs under NTR will not have any tax liability,where as under OTR,it would attract tax.

9) Form no 10 IEA:-Now tax payer must fill this form for to opt under OTR.However NTR has been made default tax regime and as such no form is to be filled for opting  NTR.

10) Standard deduction:-Salaried employees,pensioners under OTR are entitled to standard deduction of Rs 50000/-,where as under NTR,the same is For Rs 75000/-.

11) Family pension:-Under OTR, family Pensioner is entitled for deduction of Rs 15000/-and under NTR,deduction is now available upto Rs 25000/-

12) concludingly,NTR will now become preferred option for tax payers due to enhanced benefits,lower tax rates and wider tax slabs.OTR will gradually loose charm .

S M.Wate,21.9.24

Nagpur.