Income Tax Deduction Allowed in the new income tax regime A.Y.2024-25 as per Budget 2023| A new and optional income tax regime was announced in the Union Budget 2023. Under this new regime, the income tax slab rates have been reduced significantly. However, denomination slab fees come at the expense of traditional income tax deductions that can be claimed under the old (existing) tax regime. As things stand now, both tax regimes will be available together in A.Y 2024-25 (F.Y 2023-
24).
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An Individual or Hindu Undivided Family (HUF) is now eligible to pay income tax based on the following new income tax rates for the tax year 2023-24:
| Income Slab | Income Tax Rate |
| 0 – Rs. 3,00,000 | Nil |
| Rs. 3,00,000 – Rs. 6,00,000 | 5% |
| Rs. 6,00,000 -Rs. 9,00,000 | 10% |
| Rs. 9,00,00 – Rs. 12,00,000 | 15% |
| Rs.12,00,000 – Rs.15,00,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Although the new regime offers lower income tax rates, the following conditions must be met in order to be eligible for income tax under the new (corporate) income tax slab rates:
• The entire fund of an individual or HUF does not have to be in business capital.
• The gross income of the natural person or HUF should be computed without applying
The notified exemptions and deductions are allowed under different sections of the Income Tax Act.
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• Net income should be recognized without offsetting any losses, including transfer-related losses and depreciation. Also, capital losses from the sale of home ownership cannot be deducted from total income.
• The total amount should be quoted without deduction for allowances or gratuities under any other law than in force.
These deductions are allowed under the new income tax regime
While most tax deductions and exemptions cannot be claimed under the new tax regime, the following deductions are allowed under the existing rules:
• Employer contribution to retirement account provided under Section 80CCD (2) of the Income Tax Act. However, this deduction cannot exceed 10% of the employee’s salary for the previous year.
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• Up to 30% of the employee’s additional income under Section 80JJAA of the Income Tax Act.
• Transportation assistance provided to workers with disabilities (divyang) to travel between their place of residence and place of work.
• Provision of transportation to carry out office work.
• Any allowances provided to cover tour/travel expenses.
• Meals provided to an employee to meet normal daily responsibilities when he or she is required to work in a different environment than usual.
• Normal exemption U/s 16(ia) Max Rr. 50,000/- New Insert this section as per Budget 2023
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8) Automatic Income Tax Form 16 Part A&B revised for the financial year 2023-24
9) Automatic Income Tax Form 16 Part B revised for the financial year 20
