New Tax Regime FY 2023 vs FY 2024 After Budget: Top 10 Points You Must Know

The union budget 2024–2025 is out and all eyes are on the improved tax regime. The key question everyone is contemplating is which income tax regime to choose following the 2024 budget? How much tax benefit can one expect from the improved tax regime?

According to the budget announcements, salaried individuals in the new tax regime can now save ₹17,500 in income tax. Given the varied salary brackets, how much income tax will an individual be able to save at their level? Let's take a look.

Here's a look at 10 key points to know:

1. Improved tax rate for varying salary brackets: New tax rates for taxpayers following varying income brackets are as follows:

Up to 3 Lakhs: NIL

₹3–7 Lakhs: 5%

₹7–10 Lakhs: 10%

₹10–12 Lakhs: 15%

₹12–15 Lakhs: 20%

₹15 Lakh and above: 30%

2. Standard deduction limit: Under the revised tax regime, the standard deduction limit has been raised to ₹ 75000 from the earlier ₹ 50000.

3. New regime at ₹5.5 Lakh: If an individual is earning ₹ 5.5 lakh and he/she is under the existing regime, then they will not have to undergo any specific changes under the revised tax regime. They will be liable to zero tax under both regimes.

4. New regime at ₹ 7.75 Lakh: For an individual earning ₹ 7.75 lakh, the tax outgo would be ₹ 49,400 in the case of the old tax regime. Whereas with the new regime, the tax outgo would become zero, saving a total of ₹ 49,400.

5. New regime at ₹10 Lakh: For an individual making ₹ 10 lakh, the improved tax regime will offer a benefit of ₹ 10,400, setting the total tax outgo at ₹ 44,200 from 54,600.

6. New regime at ₹20 Lakh: For a salaried taxpayer earning ₹ 20 lakh, the tax outgo will be reduced by ₹ 18,200 under the revised new regime 2024.

7. New regime at ₹65 Lakh: In accordance with the revised tax regime 2024, the total tax savings would be ₹ 20,020 for an individual earning ₹ 65 lakhs.

8. New regime at ₹6 Crore: In comparison to the existing tax regime, the new regime will offer a tax benefit of ₹ 22,750 for a salaried individual with an income of ₹ 6 crore.

9. TCS can be adjusted against TDS: This comes as a major relief for salaried taxpayers. The budget 2024 has offered the TCS (tax collected at source) to be adjusted against TDS on salary. This will particularly ease the burden on those who send remittances to foreign countries.

10. New or old: To understand the potential benefits of switching to the new tax system or the benefits associated with staying with the existing one, one must perform their own wage calculations.