Introduction

The Indian Income Tax framework has seen several significant updates for the fiscal year 2023-24 (Assessment Year 2024-25). These changes are aimed at simplifying the tax process, increasing compliance, and providing benefits to various sectors of the economy. Here is an in-depth look at the key updates.

Revised Income Tax Slabs

For the fiscal year 2023-24, the government has revised the income tax slabs under the new tax regime, making it the default option for taxpayers. The key slabs are as follows:

• Income up to ₹3,00,000: No tax
• ₹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%

Senior citizens above 80 years have an exemption limit of ₹5,00,000, and for those aged 60 to 80, the limit is ₹3,00,000​ (ClearTax)​​ (ClearTax)​.

Major Procedural Changes

1. Default Regime: The new tax regime is now the default. Taxpayers wishing to switch to the old regime must submit Form 10-IEA while filing their returns.
2. Leave Encashment Exemption: The exemption limit for leave encashment on retirement for non-government employees has been increased from ₹3 lakhs to ₹25 lakhs​ (ClearTax)​​ (TaxGuru)​.

Changes in Presumptive Taxation

The thresholds for presumptive taxation have been raised:

• Small Businesses: From ₹2 crores to ₹3 crores
• Professionals: From ₹50 lakhs to ₹75 lakhs

These changes are subject to the condition that 95% of the receipts are through online modes​ (ClearTax)​​ (TaxGuru)​.

Amendments to Capital Gains Tax

1. Debt Mutual Funds: Long-term capital gains (LTCG) benefits on debt mutual funds have been removed, and they will now be taxed as short-term capital gains.
2. Electronic Gold Receipts: Conversion of physical gold to Electronic Gold Receipts and vice versa is tax-free.
3. Cap on Reinvestment of Capital Gains: A cap of ₹10 crores on reinvestment of capital gains from the sale of housing property under Sections 54 and 54F​ (TaxGuru)​.

Corporate Tax Changes

• Corporate Tax Rate: Decreased to 22% for existing domestic companies and 15% for new manufacturing companies.
• Exemption Extensions: Various exemptions for sovereign wealth funds, pension funds, and investments by the Abu Dhabi Investment Authority have been extended till March 31, 2025​ (TaxGuru)​​ (TaxGuru)​.

Enhanced Taxpayer Services

The government has focused on improving taxpayer services by introducing:

• Faceless Assessments: Increased efficiency, transparency, and accountability in the assessment process.
• Pre-filled Tax Returns: Simplified filing process with reduced average processing time for returns from 93 days to 10 days​ (TaxGuru)​.

Conclusion

The updates in the income tax laws for 2024 reflect the government’s commitment to simplifying tax compliance, providing relief to taxpayers, and encouraging digital transactions. Taxpayers should evaluate the new changes carefully to make informed decisions and optimize their tax liabilities.

For more detailed information, you can visit sources like ClearTax and TaxGuru.