What are the important changes in the newly implemented Tax Regime?
Important changes have been made in the tax regime from April 1, 2024. Kindly enlighten us as to the advantages of that tax regime.
New tax regime
Effective
from April 1, 2024, the new tax system will be implemented as a standard
option, aimed at simplifying the process of paying taxes and attracting more
people to opt-in.
Taxpayers have the ability to continue using the previous tax system if it benefits them more.
How are the tax slabs?
The tax
brackets under the recently implemented tax system are as follows:
•
Individuals with salary between Rs 3 lakh and Rs 6 lakh are taxed at 5 percent.
•
Individuals earning income between Rs 6 lakh and Rs 9 lakh in a given financial
year are required to waive 10 per cent tax.
• Those whose
income falls between Rs 9 lakh and Rs 12 lakh will have to pay tax at the rate
of 15%.
• You get
Rs. 12 lakh to Rs. Income up to 15 lakhs will be taxed at 20 percent.
• 30% tax rate will apply to those earning 15 lakhs.
The new tax regime introduces a revised standard deduction.
• In the new
tax system, the earlier standard deduction of Rs 50000, which was exclusive to
the old tax system, has been consolidated. This adjustment will result in a
significant reduction in taxable income due to the new tax regime.
• Surcharge
with the highest rate, earlier 37%, has been revised down to 25% for earnings
above INR 5 crores.
Imposition of tax on maturity benefits from life insurance contracts:-
• With
effect from April 1, 2023, maturity proceeds from life insurance policies with
premium exceeding Rs 5 lakh are taxable.
• Increasing
the tax exemption limit for leave encashment at the time of retirement.
• The
threshold for encashment of tax-exempt leave for non-government employees has
been increased from INR 3 lakh to INR 25 lakh.
New rules
have been implemented regarding income tax, NPS, credit cards and insurance
policies. For a comprehensive understanding, please consult the provided
resource.
• From April 1, the new financial year, FY2024-25, will begin. This date marks the commencement of income tax changes as proposed in the Union Budget. It must be recognized that the financial year starts on 1st April and ends on 31st March of the following year.
• With the
commencement of the new financial year from April 1, there will be various
amendments in the rules related to NPS, EPFO, taxation and FASTag among other
financial issues. A thorough understanding of these reforms is necessary to
optimize savings opportunities and comply with regulatory requirements.
The new tax regime entails significant modifications to the existing tax framework:-
From April 1, 2024, the Center will establish the new tax regime as a standard option. Individuals who do not expressly opt out of the old tax structure will be taxed and charged under the new tax system.
In the
coming financial year 2024-25, the income tax bracket under the new tax regime
will remain constant (AY 2025-26). The Interim Budget is unchanged, with no
changes announced to date. As per the revised rules, a person earning salary up
to Rs 7 lakh per annum has been exempted from tax liability.
NPS: Two-factor authentication:-
The Pension Fund Regulatory and Development Authority has announced that it will enhance the security of the National Pension System from April 1, 2024. A two-step verification method involving Aadhaar authentication has been integrated into the advanced system to provide password access. - Secure CRA system. The implementation of this feature was officially announced through a circular published on 15 March 2024.
The two-factor Aadhaar authentication process will serve as a supplementary verification step to validate the validity of the fingerprint and reduce the number of spoofing attempts. Using Aadhaar for transaction authentication will increase security and stability.
As per the PFRDA directive, an Aadhaar-authenticated login method will be added to the existing user ID and password login system. It is mandatory to implement 2-factor authentication to gain access to the NPS CRA system.
Pursuant to PFRDA's announcement, enhanced security measures have been implemented to access the CRA system, with the main objective of protecting the interests of customers and stakeholders, the login process of the CRA system will be enhanced with additional security measures, implemented through Aadhaar. - based authentication.
The two-factor authentication process, which includes Aadhaar-based login authentication, will be merged with the existing user ID and password verification system to enhance the security features of the CRA system, the message was supplemented with the new notification.
Ola money wallet
Effective
April 1, OLA Money disclosed its intention to move towards small PPIs wallet
services, capping the monthly wallet load at Rs 10,000.
New rule of FASTag:-
Commencing April 1, failure to revise the KYC of your vehicle's FASTag with the banking institution could result in complications. It is It is obligatory for you to finish the KYC procedure for your FASTag prior to March 31 to prevent deactivation by financial institutions. Failure to submit current KYC information will prevent payments from being processed, resulting in the imposition of dual toll tax charges. The NHAI urges FASTag users to adhere to RBI regulations for uninterrupted transactions at toll booths.
Credit card adjustments/tweaks:-
SBI Card has announced modifications to its policy regarding the accumulation of reward points. Starting Effective April 1, 2024, the process of accruing reward points for rental payments will no longer be valid for the selection of credit cards issued by the institution. The influence on the mentioned cards is significant: AURUM, SBI Card Elite, and SimplyCLICK SBI Card, among others.
ICICI Bank has made modifications to the eligibility criteria for its free airport lounge facility. Starting April 1, 2024, In order to be eligible for a free airport lounge visit during the next quarter, patrons must have spent a minimum of Rs 35,000 in the previous calendar quarter. The aforementioned modification affects a range of ICICI Bank credit cards, including the Coral Credit Card and MakeMyTrip ICICI Bank Platinum Credit Card, among others.
Yes Bank announces changes to the lounge access perks for its domestic customers, effective from April 1, 2024. In accordance with the bank's latest declaration, cardholders are required to expend a minimum of Rs 10,000 during a specific quarter to secure lounge privileges in the ensuing quarter.
As per an
electronic communication received from Axis Bank, the Reserve Bank of India has
announced, vide circular no. DoR.MCS.REC.28/01.01.001/2023-24 (RBI/2023-24/53)
dated August 18, 2023 on “Fair Lending Practice - Penal Charges in Loan
Accounts”, issued instructions (“RBI instructions”) regarding quantum and levy
of Penal Charges on Loan Accounts. The RBI directives stipulate that penalties
be classified as "Charges for Penalties" rather than "Interest
on Penalties."
Debit cards:-
Effective April 01, 2024, SBI has announced an increase of Rs 75 in the annual maintenance fees for certain debit cards, according to their website.
Mutual funds:-
Effective April 1, investors lacking up-to-date KYC (Know Your Customer) documentation will be prohibited from executing mutual fund (MF) transactions. In addition to SIPs (Systematic Investment Plans), SWPs (Systematic Withdrawal Plans), and redemptions, the following paragraph encompasses other related concepts.
Emails were
dispatched to mutual fund distributors by registrars and transfer agents,
namely CAMS and KFintech, MF investors are required to update their KYC (Know
Your Customer) information by March 31. The
emails refer to legitimately recognized papers, which consist of an Aadhaar
card, a passport, and a voter identification card, among others. After the
specified deadline, the validity of Know Your Customer verifications carried out using documents like
bank statements and utility bills will expire.
E- insurance coverage will be compulsory in the future:-
Beginning April 01, 2024, the Insurance Regulatory and Development Authority of India (IRDAI) requires that insurance policies be digitised. In accordance with this mandate, all insurance contracts encompassing the sectors of life, health, and general coverage will be electronically issued.
The monetary amount that policyholders receive upon relinquishing their insurance policies is referred to as the surrender value.
The Insurance Regulatory and Development Authority of India (IRDAI) has issued the final regulations concerning surrender values. Beginning April 01, 2024, it is anticipated that the surrender value may not increase or could potentially decrease if policies are relinquished within the initial three-year period. Should policies be relinquished during the fourth to seventh years, a minimal enhancement may be observed in the surrender value.
Upon premature termination of the insurance agreement, the insurer dispenses a termination benefit to the policyholder, manifesting as a surrender value.
I believe I
have effectively communicated the intricacies of the tax system to you.
