The Union Budget for the year 2024 was presented before the parliament on July 23rd by the Union Finance Minister, Nirmala Sitharaman. In the budget, the central government modified the income tax legislation under the new tax regime, making it more appealing and attractive compared to the old tax regime.
It is noteworthy that the Union Budget 2024 has introduced major changes to the new tax regime.
The union has basically raised the standard deduction to Rs 75,000, lowering the tax payable by altering the income tax slabs, and raising the deduction on the employer’s contribution to the NPS account under the new tax regime to 14%.
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With the beginning of the present financial year (FY) in the month of April, the salaried individuals had already communicated to their employers regarding their choice of tax regime for the purpose of deduction of tax from their respective salaries. And this information could be used by the employer for the purpose of calculating tax deducted at source from each employee’s salary.
In most cases, this choice has to be made in the first month of the financial year as per employers’ requirements.
And the changes that have been made in the latest Union budget to the new tax regime are almost after 4 months of the present financial year 2024-2025.
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The important aspect to note is that as favorable changes have been brought to the new tax regime, the individuals who chose the old tax regime in April 2024 may want to opt for the new tax regime for TDS on salary. Thus, for FY 2024-25, salaried individuals should have the power to choose the tax regime for TDS on salary.
Ultimately, it is up to the government to decide whether or not to provide taxpayers with this option of switching their choice of tax regime.
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