As on 1 Feb 2023, Union Budget has been presented by the Finance Minister. Finance Act 2023 has brought 122 amendments in the Income Tax Act, 1961. Salaried and Middle class people were expecting some positive changes in Income Tax, in that line One of the most discussed amendment was changes made in section 115BAC. 115BAC is a new regime of taxation.
Amendments Applicable from A.Y. – 01st April 2024. ( It will be applicable from F.Y 2023-24)
Applicable on-
1. Individuals.
2. HUF
3. AOP/BOI ( Not applicable on co-operative societies.)
4. Artificial Juridical person.
Rate of Tax-
| Total Income | Rate of Tax |
| upto Rs- 3 lakhs | Nil |
| above 3 lakhs upto 6 Lakhs | 5% |
| above 6 lakhs upto 9 Lakhs | 10% |
| above 9 lakhs upto 12 lakhs | 15% |
| above 12 lakhs upto 15 lakhs | 20% |
| above 15 lakhs or more | 30% |
Some facts about the changes made in Section 115BAC –
- New regime would be default regime at the Income tax portal for the purpose of calculating tax and filing ITR, however Tax payers can change this per their convenience by filing form 10-IE before the due date of filing the return of Income.
- Persons who do not have any income from business or profession ( Salaried people) can change their regime as per their convenience. Their is no restriction for opting old or new regime. They can change each year.
- Standard deduction has been allowed i.e, 50,000.
- Rebate u/s 87A has been increased to 25,000.
- Surcharge has been reduced from 37% to 25%.
- Persons having income from ” Business or Profession” shall be allowed once to change their regime once opted to new regime.
- NO deduction shall be allowed except 80CCD(2) and 80JJAA.
- Set-off of housing loan loss is also not allowed.
Decision making framework whether to choose old regime or New Regime.
Every person has its own investment plans and way of spending money. choosing between old regime and new regime can be explained based on the basis of Income and deduction and exemptions available.
| INCOME LEVEL | DEDUCTIONS+EXEMPTIONS | OLD V/S NEW |
| Upto 7 lakhs | More than 2 lakhs | Old |
| Upto 7 lakhs | Less than 2 lakhs | New |
| Upto 8 lakhs | More than 2.125 lakhs | Old |
| Upto 8 lakhs | Less than 2.125 lakhs | New |
| Upto 9 lakhs | More than 2.625 lakhs | Old |
| Upto 9 lakhs | Less than 2.625 lakhs | New |
| Upto 10 lakhs | More than 3 lakhs | Old |
| Upto 10 lakhs | Less than 3 lakhs | New |
| Upto 11 lakhs | More than 3.25 lakhs | Old |
| Upto 11 lakhs | Less than 3.25 lakhs | New |
| Upto 12 lakhs | More than 3.50 lakhs | Old |
| Upto 12 lakhs | Less than 3.50 lakhs | New |
| Upto 13 lakhs | More than 3.62 lakhs | Old |
| Upto 13 lakhs | Less than 3.62 lakhs | New |
| Upto 14 lakhs | More than 3.75 lakhs | Old |
| Upto 14 lakhs | Less than 3.75 lakhs | New |
| Upto 15 lakhs | More than 4.085 lakhs | Old |
| Upto 15 lakhs | Less than 4.085 lakhs | New |
| Above 15 lakhs | More than 4.25 lakhs | Old |
| Above 15 lakhs | Less than 4.25 lakhs | New |
Purpose behind the making amendments
- Curbing the fake deductions claimed by the Tax-payers.
- To mitigate the tax burden for taxpayers earning income upto Rs 7 lakhs and do not have any deductions and exemptions to claim.
Author Bio
Please check break even points. There seems to be some error.
Dear Dipesh,
Thank you for your feedback, Article was drafted with proper care and calculation is correct, will re-check and edit the same if required.
Whether deduction under section 80U would be allowed or not under new tax regime from AY 2024-25
Dear Mr Rawat,
No deduction would be allowed u/s 80U, all the allowable deduction has been explained in the article itself. New regime provides a concessional rate of tax thus no further deduction is allowed.
if your query still not resolved feel free to contact me.