2024 Budget: Comparing Old vs New Income Tax Rules – Which is Better for You?

Thu, 01 Feb 2024 10:52:00 +0000

Comparing Old vs New Income Tax Rules: Budget 2024 – The government has made important changes to encourage taxpayers to adopt the new tax system introduced in the Union Budget 2020. The new tax system offers lower tax rates, but it also means that taxpayers can no longer claim certain exemptions and deductions like HRA, LTA, 80C, and 80D.

Comparing Old vs New Income Tax Rules: Key Amendments

The government has raised the tax rebate limit from Rs 5 lakhs to Rs 7 lakhs in the old tax system. As a result, individuals earning up to Rs 7 lakhs don’t have to pay any taxes under the new tax system.

Streamlined Tax slabs

Comparing Old vs New Income Tax Rules: Budget 2024 – In the 2023 Budget amendments, the tax exemption limit was increased to Rs 3 lakhs, accompanied by revised tax slabs.

☞ Income up to Rs 3,00,000: Nil
☞ Income from Rs 3,00,001 to Rs 6,00,000: 5%
☞ Income from Rs 6,00,001 to Rs 9,00,000: 10%
☞ Income from Rs 9,00,001 to Rs 12,00,000: 15%
☞ Income from Rs 12,00,001 to Rs 15,00,000: 20%
☞ Income above Rs 15,00,001: 30%

Old Tax Regime Overview

As per Comparing Old vs New Income Tax Rules last year, Under the old tax system, taxpayers had access to more than 70 exemptions and deductions, like Home Rent Allowance (HRA) and Leave Travel Allowance (LTA). These deductions helped lower taxable income and reduce the amount of taxes owed.

Section 80C was a highly popular and generous deduction that allowed taxpayers to reduce their taxable income by up to Rs. 1.5 lakh.

Income Tax Slabs 2023-24 (Old Regime)

☞ Up to Rs 250,000: Nil
☞ Rs 250,001 to Rs 500,000: 5%
☞ Rs 500,001 to Rs 1,000,000: 20%
☞ Above Rs 1,000,000: 30%

Additional Considerations for Old Tax Regime

For individuals who are 60 years or older (senior citizens), the minimum taxable income limit is Rs 300,000. For those who are 80 years or older (super senior citizens), the minimum taxable income limit is Rs 500,000.

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