What is Income Tax Regime?
Governments apply income taxes on the money that people and companies that fall under their purview earn. It is a significant source of income for the government, which is utilized to pay for infrastructure and public services. The tax is normally computed as a percentage of the taxpayer’s income, and the rate varies based on the country’s tax rules as well as the amount of money received. To record their income and ascertain the amount of tax owed, taxpayers in the majority of countries must file an annual tax return.
Why we Pay Income Tax?
We pay income tax for several key reasons:
- Funding Public Services
- Infrastructure Development
- Government Operations
- Social Programs
- Economic Stability
- National Defense
On other key factor also depends.
Which is better tax regime 1 or 2?
On the basis of new tax regime (2024-2025) financial year,the tax burden under the new tax regime is ₹50,000 (5 percent of 4,00,000 + 10% of 3,00,000). Upon deducting the ₹25,000 87A refund, the remaining tax obligation is ₹25,000. Thus, there is a ₹75,000 difference between the two tax systems.
What is the present income tax regime 2024-2025?
NEW TAX REGIME
| Annual Income Up to | Rate% | Other Tax% |
|---|---|---|
| 0 to 3 Lakh rs | 0% | 0% |
| 3 Lakh to 7 Lakh | 5% | 0% |
| 7 Lakh to 10 Lakh | 10% | 0% |
| 10 Lakh to 12 Lakh | 15% | 0% |
| 12 Lakh to 15 Lakh | 20% | 0% |
| 15 Lakh + Income | 30% | 0% |
OLD TAX REGIME
| Annual Income Up to | Rate% | Other Tax% |
|---|---|---|
| 0 to 3 Lakh rs | 0% | 0% |
| 3 Lakh to 6 Lakh | 5% | 0% |
| 6 Lakh to 9 Lakh | 10% | 0% |
| 9 Lakh to 12 Lakh | 15% | 0% |
| 12 Lakh to 15 Lakh | 20% | 0% |
| 15 Lakh + Income | 30% | 0% |
What is the tax slab for FY 2024 25?
The income tax brackets in India under the new regime are as follows for the financial year 2024–2025: Until ₹3,00,000: Nothing 5% of ₹3,00,001 to ₹7,00,000 From 7,00,001 to 10,000,001: 10% Between ₹10,001 and ₹12,00,000: 15% From ₹12,000,000 to ₹15,000,000: 20 percent Above ₹15,000,000: thirty percent.
How much income is tax free?
Free Income tax depends upon age,if you are senior citizen than your free income tax payout is different. And you are extreme senior citizen then your income tax different. And if you are not a senior citizen then your free income tax is different. To your chosen tax regime.
Under the New Tax Regime:
- For individuals (including senior citizens and super senior citizens): Income up to ₹3,00,000 is tax-free.
Under the Old Tax Regime:
- For individuals below 60 years of age: Income up to ₹2,50,000 is tax-free.
- For senior citizens (60 to 80 years of age): Income up to ₹3,00,000 is tax-free.
- For super senior citizens (above 80 years of age): Income up to ₹5,00,000 is tax-free.
Additionally, under both regimes, individuals with a net taxable income of up to ₹5,00,000 can avail of a tax rebate under Section 87A, making their tax liability nil.
How can I save taxes in the new tax regime in 2024?
- Compare your tax liabilities under Old vs. new tax regime in 2024.
- Invest in best tax-saving investments in 2024.
- Avail of Section 80TTB deduction of Rs. 50,000.
- Claim tax benefits on home loan.
- Maximize employer contributions.
How can I save 100% income tax?
Saving 100% on income tax in India requires strategic planning, utilizing all available exemptions, deductions, and rebates. Here are some key ways to potentially achieve this:
- Public Provident Fund.
- National Pension Scheme.
- Premium Paid for Life Insurance policy.
- National Savings Certificate.
- Equity Linked Savings Scheme.
- Home loan’s principal amount.
- Fixed deposit for five years.
- Sukanya Samariddhi account.
How to get zero income tax?
To achieve zero income tax liability, you need to carefully plan your finances to maximize deductions, exemptions, and rebates. Here’s a structured approach:
- Income Rebate (Section 87A)
- Maximize Deductions Under Section 80C (Up to ₹1,50,000)
- Health Insurance Premiums (Section 80D)
- Home Loan Interest (Section 24)
- Additional NPS Contribution (Section 80CCD(1B))
- Interest on Education Loans (Section 80E)
- Tax-Free Income:
- Ensure all exempt income sources like agricultural income, gifts from specified relatives, etc., are utilized where applicable.
Conclusion:Here we provide information about INCOME TAX REGIME on the basis of information aviable on our digital platforms and recent news activities.