New Tax Regime as Default for A.Y. 2024-25 – Official Income Tax Regime & Tax Calculator : Guidelines for Individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons
New Tax Regime as Default for A.Y. 2024-25 – Official Income Tax Regime & Tax Calculator : Guidelines for Individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons
Income Tax Department, Government of India has established the New Tax Regime as the default tax regime for the Assessment Year (A.Y.) 2024-25. This regime applies to individual taxpayers, Hindu Undivided Families (HUFs), Associations of Persons (AOPs) (excluding cooperative societies), Bodies of Individuals (BOIs), and Artificial Juridical Persons.
Taxpayers who prefer the Old Tax Regime must follow specific procedures depending on their eligibility to file different Income Tax Return (ITR) forms.
Option under Income Tax Section 115BAC – Old vs. New Tax Regime: Circular with format of Declaration for Old Regime
The Central Public Works Department, Directorate General, in New Delhi, issued a circular regarding Section 115BAC of the Income Tax Act, 1961. This section, introduced by the Finance Act 2020, offers taxpayers an option to choose between the old tax regime, which allows various deductions and exemptions, and the new tax regime with lower tax rates but no exemptions. The circular provides detailed information on tax slabs and rates under both regimes and urges officials in the Directorate to declare their choice by October 20, 2023, to avoid defaulting to the old tax regime.
Option under Income Tax Section 115BAC – Old vs. New Tax Regime: CPWD Circular dated 09.10.2023
Directorate General
Central Public Works Department
Nirman Bhawan, New Delhi
(Cash Section)
Dated 09.10.2023
CIRCULAR
Section 115BAC of the Income Tax Act, 1961 inserted by the Finance Act 2020 has introduced a new income tax regime that comprises a significant change in the tax slabs rates. Taxpayers have been provided with an option whether they want to pay taxes according to the existing regime.
1. Old Tax Regime:
Under the Old regime, the tax shall be calculated considering all deductions and exemptions allowed under Income Tax Act, 1961, which were hitherto available. The slab rates are mentioned in table below.
2. New Tax Regime:
Under the New Tax Regime, tax shall be calculated as per the slab rates as mentioned in table below. In this regime, the tax rates are kept lower but no exemptions/deductions are allowed.
Option under Income Tax Section 115BAC – Tax Slab Table Old vs. New Tax Regime
Table
| Tax Slab | Earlier Rate | New Rate |
| Upto 2.50 lakh | Nil | Nil |
| 2.50 to 5.00 lakh | 5% | 5% |
| 5.00 to 7.50 lakh | 20% | 20% |
| 7.50 to 10.00 lakh | 15% | |
| 10.00 to 12.50 lakh | 30% | 20% |
| 12.50 to 15.00 lakh | 25% | |
| Above 15.00 lakhs | 30% |
All officials working in this Directorate are requested to furnish their option whether they want to compute their taxes as per Option 1 (Old Tax Regime) or Option 2 (New Tax Regime) by 20t October, 2023. If the required option is not furnished by due date, Income Tax will be calculated on the basis of Old Tax Regime.
(L FIMATE)
DDO/SO CASH
To,
All officials of this Directorate (through CPWD website)
Option under Income Tax Section 115BAC – DECLARATION (for old tax regime option only)
DECLARATION (for old tax regime option only)
I hereby declare that I am contributing / saving or will contribute / save during the financial year 2023-24:
| Sl. | Name of Saving / Contributions | Amount (₹) |
| 1. | General Provident Fund | |
| 2. | Postal Life Insurance | |
| 3. | C.G.E.G.I.S. | |
| 4. | Premium LIC Policy/Policies (Limited to 10 & 15% of the sum assured | |
| 5. | ULIP 1971 (UTI Act, 1963 | |
| 6. | Public Provident Fund | |
| 7. | Deposit with Post Office in 10 to 15 years (CTD | |
| 8. | Deposit under Jeevan Suraksha (Pension Scheme | |
| 9. | Equity linked Saving Scheme (Mutual Fund) Infrastructure Bonds etc. | |
| 10. | National Savings Certificate | |
| 11. | HBA Principal amount | |
| 12. | Tuition Fees (upto two children) | |
| 13. | Contribution to the New Pension Scheme, Limited to ten percent of salary | |
| 14. | Government Contribution to the New Pension Scheme | |
| 15. | Subscription to equity shares/debentures forming part of any ” eligible issue of capital” | |
| 16. | Fixed Deposit for a minimum period of 5 years |
(N.B. – The aggregate amount of maximum rebate on savings sl. no. 1 to 16 is Rs. 1,50,000)
| 17. | Medical Insurance(Under Sec. 80D) Max ₹25,000 and ₹50,000 tor Sr. Citizen) | |
| 18. | Expenditure in medical treatment/training and rehabilitation of any dependant (Max. ₹75,000 and ₹1,25,000 in the case of severs disability) under sec. 80 DD) | |
| 19. | Interest on Education Loan (Under Section 80E). | |
| 20. | Any donation for charitable purposes (Under Sec. 80G) | |
| 21. | Permanent Disability (Under Sec. 80U) max. ₹75,000 or ₹1,25,000, as the case may be | |
| 22. | Self-occupied House Property (Under Sec. 24 Max. ₹30,000 Loan taken prior to 01.04.1999\₹2,00,000 after 01.04.1999 (Interest certificate issued from Bank) | |
| 23. | I certify that I am living in a rented House No… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … and paying rent @ Rs. … … … … … … … … per month |
Note: No Exemption of HRA would be allowed without Rent Receipts/Rent agreement. If rent exceed ₹1,00,000/- Form No. 12BB and PAN of landlord is mandatory.
| 24. | In addition to my salary, I will receive / have received the following income(s) 1. | |
| 25. | Addition rebate up to ₹50000/- for investment in NPS (section 80CCD-1B) |
Signature . … … … … … … … …
Name . … … … … … … … …
Designation . … … … … … … … …
PAN . … … … … … … … …
How to Opt for the Old Tax Regime
For Taxpayers Eligible to File ITR 1 & 2
If you are eligible to file your return of income using ITR 1 (Sahaj) or ITR 2:
- Select the Relevant Option: During the process of filing your ITR, you will have the option to choose between the New Tax Regime and the Old Tax Regime. Simply select the Old Tax Regime option within the ITR form.
- File Within the Applicable Due Date: Ensure that your tax return is filed within the due date to benefit from the Old Tax Regime.
For Taxpayers Eligible to File ITR 3, 4 & 5
If you are eligible to file your return of income using ITR 3, ITR 4 (Sugam), or ITR 5:
- File Form 10-IEA: Before filing your ITR, you must submit Form 10-IEA to notify the Income Tax Department of your choice to opt for the Old Tax Regime.
- File Return Within the Applicable Due Date: After submitting Form 10-IEA, proceed to file your ITR 3, 4, or 5 within the due date.
Importance of Comparing Tax Liability
It is crucial to compare your tax liability under both the New Tax Regime and the Old Tax Regime before finalizing your tax return. The New Tax Regime offers lower tax rates with fewer exemptions and deductions, while the Old Tax Regime allows for various deductions and exemptions which might result in a lower tax liability for some taxpayers.
To facilitate this comparison, use the Income Tax Calculator provided by the Income Tax Department. This tool will help you accurately calculate and compare your tax liabilities under both regimes.
Steps to Use the Income Tax Calculator
- Visit the Income Tax Department’s official website.
- Navigate to the Income Tax Calculator: Find the calculator under the ‘Tax Tools’ or a similar section on the website.
- Enter Your Details: Input your income details, deductions, and exemptions as applicable.
- Compare Results: Review the tax liabilities computed under both the New Tax Regime and the Old Tax Regime to make an informed decision.
For the A.Y. 2024-25, the New Tax Regime is the default choice for individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons. However, those who wish to continue with the Old Tax Regime can do so by following the specified procedures based on their ITR form eligibility. Always compare the tax implications under both regimes to determine the most beneficial option for your financial situation.
Ensure timely submission of your ITR and any necessary forms to avail the benefits of your chosen tax regime.
For more details and to access the Income Tax Calculator, please visit the official Income Tax Department website.
Note: This article is based on the guidelines effective as of June 21, 2024. Tax laws are subject to change, and it is advisable to consult with a tax professional or refer to the latest updates from the Income Tax Department.
Click here for Official Income & Tax Calculator
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