ITR filing: New tax slabs, rules to keep in mind before submitting returns

New Delhi: Taxpayers filing tax returns for FY25 should be aware of the new income tax slabs and capital gains tax structure brought in by the Union Budget 2024, according to experts.

As per new tax slabs, individuals with taxable income up to Rs 12 lakh get full tax rebate under the new regime. Your entire income will be taxed slab wise, if your taxable income exceeds Rs 12 lakh.

The slabs are zero tax for the initial Rs 4 lakh, 5 per cent tax on Rs 4 lakh and Rs 8 lakh, 10 per cent on Rs 8 lakh to Rs 12 lakh, and 15 per cent on Rs 12 lakh to Rs 16 lakh, and so forth.

Following this revision, the old tax regime will only be advantageous to taxpayers who are eligible to claim Rs 2 lakh deduction for home loan interest under Section 24(b) or a large house rent allowance (HRA). Most other deductions are unlikely to justify remaining with the old regime, said experts.

Long-term capital gains (LTCG) tax on all financial and non-financial assets has been revised to 12.5 per cent (up from 10 per cent for equities). Short-term capital gains (STCG) tax on some assets, like equities, is now 20 per cent (up from 15 per cent). All listed financial assets held for more than a year would be classified now as long-term assets.

Further, the exemption limit for computing LTCG tax on stocks and equity mutual funds was increased from Rs 1 lakh to Rs 1.25 lakh.

The LTCG tax rate on the sale of real estate assets was cut from 12.5 per cent to 20 per cent, but the indexation benefit for properties purchased after April 1, 2001, was removed.

From FY 2024–25, even private sector employees who opt for the new tax regime and sign up for the corporate National Pension Scheme (NPS) stand to gain because employers’ contribution to employees’ basic salaries of up to 14 percent will be eligible for deduction. Earlier, this limit was only 10 per cent.

—IANS