The income tax structure in India has undergone significant changes following the Union Budget 2024. The government has revised tax slabs and increased exemptions, aiming to simplify compliance and reduce the tax burden for individuals.
Whether you’re a salaried professional, senior citizen, or pensioner, staying informed about the latest tax updates is crucial for smarter financial planning.
🔑 Key Highlights:
- Basic exemption limit raised to ₹3 lakh
- Tax slabs reduced from 6 to 5 under the new regime
- Higher standard deduction for salaried individuals (₹75,000)
- Senior citizens enjoy additional tax benefits
- Taxpayers can choose between old and new regimes
Understanding India’s Income Tax Slabs
India’s income tax system follows a slab structure, where tax rates increase with income levels. For FY 2024–25, two tax regimes are available: the old regime (with deductions and exemptions) and the new regime (simplified with lower tax rates and fewer deductions).
Old Tax Regime (FY 2024-25)
| Income Range (₹) | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Senior Citizens (60–79 years)
| Income Range (₹) | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Super Senior Citizens (80+ years)
| Income Range (₹) | Tax Rate |
|---|---|
| Up to ₹5,00,000 | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Tax Regime (Default from FY 2024–25)
The government has streamlined the new tax structure to include just five slabs, along with a rebate under Section 87A for income up to ₹7 lakh.
| Income Range (₹) | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹6,00,000 | 5% |
| ₹6,00,001 to ₹9,00,000 | 10% |
| ₹9,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
The new regime is the default, but taxpayers can opt for the old one if they prefer claiming deductions and exemptions.
Real-Life Example: How Much Tax Will You Pay?
A person earning ₹17 lakh annually may end up with a taxable income of ₹12.15 lakh after standard deductions and applicable exemptions.
Breakdown:
- Tax on ₹2.5L to ₹5L: ₹12,500
- ₹5L to ₹10L: ₹1,00,000
- Above ₹10L: ₹1,39,500
- Plus 4% cess: Total tax = ₹2,62,080
Tax Bracket Comparison: Old vs New
| Income Slab (₹) | Old Regime Tax Rate | New Regime Tax Rate |
|---|---|---|
| Up to ₹2,50,000 | 0% | 0% |
| ₹2,50,001 – ₹3,00,000 | 5% | 0% |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% |
| ₹5,00,001 – ₹6,00,000 | 20% | 5% |
| ₹6,00,001 – ₹9,00,000 | 20% | 10% |
| ₹9,00,001 – ₹10,00,000 | 30% | 15% |
| Above ₹10,00,000 | 30% | 20%-30% |
Deductions and Benefits
Under Old Regime:
- Section 80C: ₹1.5L for PPF, ELSS, NPS
- Section 80D: Health insurance premiums
- HRA and Home Loan interest exemptions
- Section 24(b): Home loan interest up to ₹2L
Under New Regime:
- Standard Deduction: ₹75,000 (up from ₹50,000)
- Leave Travel Allowance (LTA)
- Meal Coupons: Up to ₹26,400/year
- Interest on savings (Section 80TTA): Up to ₹10,000
Senior Citizens: Special Tax Breaks
- Higher exemption limits: ₹3L (60+) and ₹5L (80+)
- Simplified return filing under Section 194P for 75+
- Full rebate up to ₹7L income under Section 87A
- Can still claim deductions under 80C, 80D, and others
Income Tax Exemptions in India
Taxpayers can reduce their tax burden through exemptions such as:
- House Rent Allowance (HRA)
- Agricultural income up to ₹5,000
- Medical reimbursements
- Standard deductions and rebates under Section 87A
How to File Your Income Tax Return (ITR)
Filing is mandatory for those earning above exemption limits. The deadline is usually 31st July of the assessment year. The process is mostly online and requires:
- PAN
- Form 16 (for salaried)
- Bank statements
- Investment proofs
Note: The rebate under Section 87A allows a deduction of ₹25,000 for incomes up to ₹7L under the new regime.
Latest Tax Reforms: What’s Changed in 2024?
The Union Budget 2024 brought several taxpayer-friendly reforms:
- Higher basic exemption limit: ₹3L
- Increased standard deduction: ₹75,000
- Reduced highest surcharge: 25% (earlier 37%)
- Simplified tax slabs
- More savings for middle-income earners
For instance, someone earning ₹10 lakh annually will now save ₹10,400 more under the new regime.
Conclusion
India’s tax system has moved towards simplification, with the 2024-25 reforms offering relief to many taxpayers. The new regime brings clarity with fewer slabs and a higher standard deduction, making it ideal for individuals with fewer deductions. However, those with high investments in tax-saving instruments may still benefit from the old regime.
Choosing between the two requires careful evaluation of your income, deductions, and long-term financial goals.
FAQs
What is the current income tax structure in India?
Income tax is levied based on income levels. For FY 2024-25, the basic exemption is ₹3 lakh, with rates ranging from 5% to 30% under the new regime.
Are there different tax rates for senior citizens?
Yes, senior citizens (60+) get an exemption of ₹3L, and super senior citizens (80+) get ₹5L under the old regime.
Can I still choose the old tax regime?
Yes, you can opt for the old regime while filing your return. It may be beneficial if you claim multiple exemptions.
What are the main deductions available?
Under the old regime: Sections 80C, 80D, 24(b), HRA, etc.
Under the new regime: Higher standard deduction, LTA, and meal allowance.
When should I file my ITR?
Before 31st July of the following financial year to avoid penalties.
What’s the tax rebate under Section 87A?
A rebate of up to ₹25,000 is available for total income up to ₹7 lakh under the new regime.