Clarification regarding applicability of new tax regime and old tax regime

Posted On: 31 MAR 2024 11:20PM by PIB Delhi

It has come to notice that misleading information related to new tax regime is being spread on some social media platforms. It is therefore clarified that the new regime under section 115BAC(1A) was introduced in the Finance Act 2023 which was as under as compared to the existing old regime (without exemptions):

This regime is applicable for persons other than companies and firms, as a default regime from the financial year 2023-24 and the assessment year corresponding to this is AY 2024-25.

Under the new tax regime, the tax rates are significantly lower, though the benefit of various exemptions and deductions (other than standard deduction of Rs.50,000/- from salary and Rs. 15,000 from family pension) is not available, as in the old regime.

Although, new tax regime is the default tax regime, tax payers can choose the tax regime that they think is beneficial to them. The option for opting out from the new tax regime is available till filing of return for the AY 2024-25. Eligible persons without any business income will have the option to choose the regime for each financial year. So, they can choose new tax regime in one financial year and old tax regime in another year and vice versa.

There is no new change which is coming in from 01.04.2024.

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NB/VM/KMN

(Release ID: 2016754)

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Interim Union Budget 2024-25 retains tax rates, grants relief for direct tax demands, benefiting nearly 1 crore taxpayers.

 Interim Union Budget 2024-25 retains tax rates, grants relief for direct tax demands, benefiting nearly 1 crore taxpayers.

RELIEF FOR CERTAIN OUTSTANDING DIRECT TAX DEMANDS TO BENEFIT NEARLY 1 CRORE TAXPAYERS

Posted On: 01 FEB 2024 12:44PM by PIB Delhi

 

“Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” said the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Interim Budget 2024-25 in the Parliament today.

To ensure continuity in taxation, the Union Finance Minister proposed to extend certain tax benefits to start-ups and investments made by sovereign wealth or pension funds and tax exemption on certain income of some IFSC units till 31.03.2025.

In line with the Government’s vision to improve ease of living and ease of doing business, and to provide a relief to a large number of petty, non-verified, non-reconciled or disputed direct tax demands, many of them dating as far back as the year 1962, Smt. Sitharaman proposed to withdraw such outstanding direct tax demands up to ₹25,000 pertaining to the period up to financial year 2009-10 and up to ₹10,000 for financial years 2010-11 to 2014-15. This is expected to benefit about one crore tax-payers.

Source: PIB

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Deduction of Income Tax on Medical Reimbursement: Clarification

Deduction of Income Tax on Medical Reimbursement: Clarification issued by Principal Chief Commissioner of Income Tax, UP(East) on a RTI requisition vide reply dated 27.10.2023

OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, UP(East]
PRATYAKSH KAR BHAWAN
57, RAM TIRATH MARG, LUCKNOW- 226 001

F.No.Pr.CCIT/Tech. /Lko/RTI/2019-20/2023-24

Dated:27.10.2023

To
The CPIO/Dy. Commissioner of Income Tax (Hq.)(Admn.),
O/o The Pr. Chief Commissioner of Income Tax UP(East),
Lucknow.

Madam,

Subject: Requisition of information under the RTI Act, 2005- reg.

Please refer to your office letter bearing F.N. RTIV/FA/Pr. CCIT/Lko/Vol.1/2023-24/3352 dated 19.10.2023 regarding the above mentioned subject vide which copy of order of the First Appellate Authority dated 17.10.2023 and RTI application dated 11.07.2023 filed by Sh. Yaduvesh Chaturvedi was sent to this office.

2. In view of directions issued vide para 6 of the FAA’s aforesaid order dated 17.10.2023, the requisite information is as under:

(i) Sub clause (a) of clause (ii) of the provisa to clause (2) of section 17 of the Income Tax Act, 1961 says that any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family in any hospital maintained by the Government or any local authority or any other hospital approved by the Government for the purposes of medical treatment of its employees; shall not be treated as ‘perquisite’ therefore not taxable under the head ‘salaries’.

For clarify, provisio to clause (2) of section 17 of the Income Tax Act, 1961 is being reproduced hereunder:

Provided that nothing in this clause shall apply to,—

(i) the value of any medical treatment provided to an employee of any member of his family in any hospital maintained by the employer,

(ii) any sum paid by the employer in respect of any expenditure actually incurred by the employee on his medical treatment or treatment of any member of his family—

(a) in any hospital maintained by the Government or any local authority of any other hospital approved by the Government for the purposes of Medical treatment of it employees.

(b) in respect of the prescribed diseases85 of ailments, in any hospital approved by the Principal Chief Commissioner or Chief Commissioner having regard to the prescribed guidelines86

Provided that, in a case falling in sub-clause (5), the employee shall attach87 with his return of income a certificate from the hospital specifying the disease or ailment for which-medical treatment was  required and the receipt for the amount paid to the hospital;

ii) Further, as concerned with refund process of TDS made, the applicant is required to file the ITR for the relevant assessment year claiming excess tax deducted within due date on e-filing portal declaring true and correct particulars of income and after computing ‘Total Income’ the refund amount , if any, will be generated after the return is processed.

Yours faithfully,

(N.R. Chakravarty)
Dy. Commissioner of Income Tax (Hq.)(Tech.),
O/o the Pr. Chief Commissioner of Income-tax, Lucknow.

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Benefits for Senior Citizens and Super Senior Citizens under Income-tax Act,1961: e-Brochure

 Benefits for Senior Citizens and Super Senior Citizens under Income-tax Act,1961: e-Brochure 

 

Click the below link to view

https://incometaxindia.gov.in/Booklets%20%20Pamphlets/Senior-Citizens-E-Brochure.pdf

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Benefits for Senior Citizens and Super Senior Citizens under Income-tax Act,1961 : e-Brochure by Income Tax Department

Benefits for Senior Citizens and Super Senior Citizens under Income-tax Act,1961 – e-Brochure by Income Tax Department

Benefits for Senior Citizens and Super Senior Citizens under Income-tax Act,1961

Higher Basic Exemption

Higher Deduction for Medical Insurance Premium

Higher Deduction for Interest from Banks and Post Offices

Exemption from filing an ITR and many more… 

Income Tax Department
Central Board of Direct Taxes

BENEFITS UNDER DIRECT TAXES FOR SENIOR CITIZENS AND SUPER SENIOR CITIZENS

⇒ Who is a Senior Citizen and a Super Senior Citizen?

At any time during the relevant financial year:

• Individual resident who is of the age of 60 years or above but less than 80 years is a Senior Citizen.
• An individual resident who is of the age of 80 years or above is a Super Senior Citizen.

Note: Senior Citizen as well as Super Senior Citizen enjoys all the tax benefits available to non-senior citizens along with some special benefits.

⇒ Higher Basic Exemption for Senior and Super Senior Citizens

• For Senior Citizens the basic exemption limit is fixed at a figure of Rs. 3 lakh.
• For Super Senior Citizens, the basic exemption limit is fixed at Rs. 5 lakh.

Note: For other individual taxpayers, the basic exemption limit up to which she/he is not required to pay any tax is Rs. 2.5 lakh (For A.Y. 2023-24).

⇒ Exemption from payment of Advance Tax

• A resident Senior/Super Senior citizen need not pay any advance tax, provided he does not have any income under the head “Profits and Gains of Business or Profession “.

Note: Every person whose estimated tax liability for the year is Rs. 10,000/- or more, is liable to pay advance tax.

⇒ Benefits of Standard Deduction

• Senior Citizen and Super Senior Citizen who are in receipt of pension income from his former employer can claim a deduction up to Rs. 50,000/- against such income.

Note: If pension is less than Rs. 50,000/-, the deduction will be limited to the amount of pension received.

⇒ Higher Deduction for Medical Insurance Premium/ Medical Expenditure (Section 80D)

• The maximum limit for deduction u/s 80D in respect of payment made for health insurance premium in respect of a Senior/Super Senior citizen has been allowed at Rs. 50,000/-.
• A deduction is allowed up to Rs. 50,000/- for medical expenses incurred on the health of a Senior/Super Senior citizen provided no amount is paid for health insurance of such person.

Note:

• For claiming this deduction, it is mandatory that the health insurance premium/ medical expenses are paid by any mode other than cash and both of these deductions cannot be claimed simultaneously.
• For other individuals, the maximum limit of deduction u/s 80D is Rs. 25,000/-.

⇒ Deduction in respect of maintenance and medical treatment of a dependent with a disability (Section 80DD).

(i) A deduction u/s 80DD is allowed to a Resident Individual or HUF for medical expenditure or deposit in notified scheme for maintenance and medical treatment of a dependent with disability from Rs. 75,000/- to Rs. 1,25,000/- depending upon severity of disability. Deductions under this section shall also be allowed during the lifetime, i.e., upon attaining age of sixty years or more of the individual or the member of the HUF in whose name subscription to the scheme has been made and where payment or deposit has been discontinued.

(ii) Any annuity or lump sum amount received by the disabled dependent before his death shall not be taxable in the hands of the individual or member of the HUF w.e.f. AY 2023-24 and onward, if the said individual or the member of the HUF in whose name subscription to the scheme has been made attained the age of sixty years or more.

⇒  Higher Deduction in respect of expenses incurred for Medical Treatment of a Specified Disease or Ailment (Section 80DDB)

• For expenses incurred by the taxpayer in respect of a dependent Senior/Super Senior citizen for treatment of specified disease or ailments, a deduction of Rs. 1 lakh in a year is allowed.

Note: For other taxpayers, the amount of deduction available in respect of expenses incurred for medical treatment of specified disease or ailments of self or dependent relatives u/s 80DDB is Rs. 40,000/-

⇒ Higher Deduction for Interest Income from Bank and Post Office

• A Senior/Super Senior citizen can claim a deduction upto Rs. 50,000/- u/s 80TTB in respect of interest income earned on savings bank accounts, bank deposits, or any deposit with the post office or co-operative banks.
  In case such interest income earned by him during the year is less than Rs. 50,000/-, the payer bank/post office will not deduct any tax from such interest income.

Note: Individual taxpayers other than senior citizens are allowed maximum deduction of Rs. 10,000/- u/s 80TTA in respect of interest income from savings bank accounts.

⇒ Eligibility to file manual Income Tax Return

• A super senior citizen aged 80 years or above filing his return of income in Form SAHAJ (ITR-1) or SUGAM (ITR-4) and having total income of more than Rs. 5 lakh or having a refund claim, can file his/her return of income in paper mode. For such individuals, electronic filing of ITR-1 or ITR-4 (as the case may be) is not mandatory.

Note: The Super Senior Citizen may opt for e-filing, if he chooses to do so.

⇒ Form No. 15H for Non-Deduction of Tax at Source

• A Senior/Super Senior citizen may submit form no.15H to the deductor for non-deduction of TDS on certain incomes referred to in that section, if the tax on his/her estimated total income for the concerned year comes at nil.

⇒ Income tax exemption on Transfer of Capital assets under ‘Reverse Mortgage Scheme’.

• The transfer of a residential house property by way of a reverse mortgage as per the Reverse Mortgage Scheme made and notified by the Central Government for Senior/Super Senior citizen, is not liable to be taxed as Capital gain (nor under any other head of income).

⇒ Exemption from filing ITR

The following categories of Senior Citizens are not required to file their ITR: —

• Resident Senior Citizens, 75 years or above and
• Having only pension income and interest income only from the account(s) maintained with a bank in which they receive such pension.

Note:

(i) Applicable from A.Y. 2022-23

(ii) The specified bank shall be responsible for computing their total income and deducting tax thereon after giving effect to various deductions allowable under Chapter VI-A and rebate u/s 87A of the Act.

⇒ Applicable Tax Rates

• In respect of AY 2023-24, a senior citizen can opt for either the old or new tax regime as under:

a) Income tax rate slabs under old tax regime for senior citizens of the age from 60 to 80 years:

Income Slab	Rate of Income Tax
Upto Rs. 3,00,000/-	Nil
Rs. 3,00,001/- to Rs. 5,00,000/-	5% (if taxable income is upto Rs. 5 lakh, the tax liability is Nil on account of tax relief u/s 87A)
Rs. 5,00,001/- to Rs. 10,00,000/-	Rs. 10,000 + 20% of amount above Rs. 5,00,000/-
Above Rs. 10,00,000/-	Rs. 1,10,000 + 30% of amount above Rs. 10,00,000/-
Surcharge (subject to Marginal Relief)	If taxable income is more than Rs.50 lakh (then percentage vary from 10% to 37% depending upon the taxable income)
Health & Education Cess	4% of (Income-tax + Surcharge).

b) Income Tax slabs under old tax regime for super senior citizens (80 years and above in age)

Income Slab	Rate of Income Tax
Upto Rs. 5,00,000/-	Nil
Rs. 5,00,001/- to Rs. 10,00,000/-	20% above Rs. 5,00,000/-
Above Rs. 10,00,000/-	Rs.1,00,000/- + 30% above Rs. 10,00,000/-
Surcharge (subject to marginal Relief)	If taxable income is more than Rs. 50 lakhs (then percentage of surcharge varies from 10% to 37% depending upon the taxable income)
Health & Education Cess	4% of (Income-tax + Surcharge)

c) New Personal Income Tax Regime (115BAC) for all individuals including senior citizens and super senior citizens

Income Slab	Rate of Income Tax
Upto Rs.2,50,000/-	Nil
Rs. 2,50,001/- to Rs. 5,00,000/-	5% (if taxable income is upto Rs. 5 lakh, the tax liability is Nil on account of tax relief u/s 87A)
Rs. 5,00,001/- to Rs. 7,50,000/-	Rs.12,500/- + 10% of amount above Rs. 5,00,000/-
Rs. 7,50,001/- to Rs. 10,00,000/-	Rs. 37,500/- + 15% of amount above Rs. 7,50,000/-
Rs. 10,00,001/- to Rs. 12,50,000/-	Rs.75,000/- + 20% of amount above Rs. 10,00,000/-
Rs. 12,50,001/- to Rs. 15,00,000/-	Rs.1,25,000/- + 25% above Rs. 12,50,000/-
Above Rs. 15,00,000/-	Rs. 1,87 ,500/- + 30% above Rs.15,00,000/-
Surcharge (subject to Marginal Relief)	If taxable income is more than Rs. 50 lakhs (then percentage of surcharge varies from 10% to 37%)
Health & Education Cess	4% of (Income-tax + Surcharge).

Note: Tax deduction under chapter VIA will not be available to a tax payer opting for the New Tax Regime u/s 115BAC, except for deduction u/s 80CCD(2) and 16(ia) of the Income Tax Act, 1961.

Directorate of Income Tax
(Public Relations, Publications & Publicity)
6th Floor, Mayur Bhawan, Connaught Circus, New Delhi – 110001

Disclaimer: This brochure should not be construed as an exhaustive statement of the law.

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