New Tax Slab 2024: Read on to know about the changes affecting your New Tax Slab, National Pension System, NPS, insurance and mutual funds starting today.
New Tax Slab: April 1 marks the beginning of the new financial year (FY2024-25). All the updated rules of income tax system mentioned in the Union Budget come into effect from this date. The interim budget was unveiled in February by Finance Minister Nirmala Sitharaman and will take effect in FY25.
About New Tax Slab
Here is a list of some of the updated rules related to tax regime, National Pension System (NPS), Employees’ Provident Fund Organization (EPFO), insurance and mutual funds (MF).
New Tax Slab
New Tax Slab: As per the interim budget, the income tax slabs for the new financial year (FY2024-25), corresponding to FY 2023-24, remained unchanged. Income ranging from Rs 0 to Rs 3,00,000 will be exempted from tax. Income slab of Rs 3,00,001 to Rs 6,00,000 will be taxed at 5 percent, Rs 6,00,001 to Rs 9,00,000 at 10 percent, Rs 9,00,001 to Rs 12,00,000 at 15 percent, Rs. 20 per cent for Rs 12,00,001 to Rs 15,00,000, and 30 per cent for Rs 15,00,000 and above.
The budget has established a new tax system as the default tax regime; taxpayers are still free to select the old tax regime or the New Tax Regime 2024, though.
Benefits of the New Tax Regime 2024
>No need to maintain records of journey and fare receipts
>Basic exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh
>Taxable limit increased from Rs 5 lakh to Rs 7 lakh.
>Surcharge rates have been reduced from 37 percent to 25 percent. These reduced rates are applicable for taxpayers with income above Rs 5 crore
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New Tax Slab of Life Insurance Policies
According to the Union Budget 2023, under the New Tax Regime 2024, the amount received from life insurance policies will be taxable if the annual premium paid is more than Rs 5 lakh in a year.
e-insurance
The Insurance Regulatory and Development Authority of India (IRDAI) had earlier announced that digitalization of insurance policies will become mandatory from April 1, 2024. This mandate will be applicable to all insurance categories including life, health and general insurance for which policies will need to be issued. electronically.
New Tax Slab of Small Savings Schemes
- Starting on April 1, 2024, interest rates on a range of small savings plans will not fluctuate.Under Sukanya Samriddhi Yojana, the interest rate on deposits will be 8.2 percent, while the rate on three-year fixed deposits will be 7.1 percent.
- Interest rates for the popular Public Provident Fund (PPF) and Post Office Savings Deposit Scheme have also been retained at 7.1 per cent and 4 per cent respectively.
- The interest rate on Kisan Vikas Patra will be 7.5 percent and the investment will mature in 115 months.
- For the months of April through June of 2024, the interest rate on National Savings Certificates (NSCs) will be 7.7 percent. Like the current quarter, the monthly income scheme (MIS) will yield 7.4 per cent to investors.
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New Tax Regime 2024: Mutual Fund Investment
Without KYC from April 1, investors are not allowed to do mutual fund transactions. These transactions include Systematic Investment Plans (SIP), Systematic Withdrawal Plans (SWP), and Redemptions. KYC done based on evidence like bank statements and utility bills will no longer be valid after March 31. These days, voter IDs, passports, and Aadhaar IDs are among the officially recognized papers.
Emails were sent to mutual fund distributors by Registrars and Transfer Agents (RTAs), CAMS (Computer Age Management Services), and KFin Technologies (KFinTech) that mutual fund investors should redo their KYC by March 31.
New Rule of FASTag
If you have not updated the KYC of your car’s FASTag in the bank from April 1, then you may have to face problems. In order to prevent bank deactivation, you must finish the KYC process for your FASTag before March 31.Without updated KYC, payment will not be made, resulting in doubling of toll tax charges. NHAI has advised Fastag users to follow RBI rules for smooth transactions at toll plazas.
Change in Credit Card
SBI Card has notified amendments to its reward points accrual policy. From April 1, 2024, the accrual of reward points for rental payments across the range of credit cards offered by the institution will stop. The cards which were significantly affected include AURUM, SBI Card Elite and SimplyClick SBI Card.
ICICI Bank has announced changes to its eligibility requirements for complimentary airport lounge access. From April 1, 2024, patrons are required to realize a minimum spend threshold of Rs 35,000 in the preceding calendar quarter to be eligible for a free airport lounge visit in the next quarter. This change is applicable across various ICICI Bank credit cards, including our prestigious Coral Credit Card and MakeMyTrip ICICI Bank Platinum Credit Card.
Change in Debit Card
As mentioned on their website, SBI has increased the annual maintenance fee for specific debit cards by Rs 75, effective from April 1, 2024.
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National Pension System (NPS)
Pension Fund Regulatory and Development Authority (PFRDA) introduced two-factor authentication measure to improve security. All password-based logins to the CRA system will require two-factor Aadhaar-based authentication.
EPFO(Employee Provident Fund Organization)
The Employee Provident Fund Organization will now automatically transfer the customer’s balance to their new organization upon change of job. EPFO account holders do not need to request to transfer PF amount.
Revision in retail prices of 65 formulations.
FAQs: Regarding the Financial Changes in FY25 and Regulations
What are the changes in the new income tax slabs for FY2024-25?
The income tax slabs remain unchanged from the previous year. Income ranging from Rs 0 to Rs 3,00,000 will be exempted from tax, with subsequent slabs taxed at 5%, 10%, 15%, 20%, and 30% for different income ranges.
What are the benefits of opting for the new tax regime in 2024?
The new tax regime offers benefits such as an increased basic exemption limit, higher taxable limit, and reduced surcharge rates for taxpayers with income above Rs 5 crore.
Will life insurance policies be affected by the new tax regime?
Yes, under the new tax regime, the amount received from life insurance policies will be taxable if the annual premium paid exceeds Rs 5 lakh.
What are the changes in small savings schemes starting April 1, 2024?
Interest rates on various small savings schemes have been announced, including Sukanya Samriddhi Yojana, Public Provident Fund (PPF), Post Office Savings Deposit Scheme, Kisan Vikas Patra, National Savings Certificates (NSCs), and Monthly Income Scheme (MIS).
Are there any new regulations for mutual fund investments?
Yes, investors are now required to have updated KYC for mutual fund transactions starting from April 1, 2024. Previous KYC based on bank statements and utility bills will no longer be valid.
What is the new rule regarding FASTag?
FASTag users need to update their KYC with the bank before April 1, 2024, to avoid deactivation and payment issues. Failure to update KYC may result in doubled toll tax charges.
Are there any changes in credit card policies?
Yes, there are changes in reward point accrual policies for SBI Card, and ICICI Bank has introduced new eligibility requirements for complimentary airport lounge access.
Have there been any updates regarding debit card fees?
Yes, SBI has increased the annual maintenance fee for specific debit cards by Rs 75, effective from April 1, 2024.
What security measure has been introduced for the National Pension System (NPS)?
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced two-factor authentication for all password-based logins to the CRA system, requiring Aadhaar-based authentication.
What changes have been made to EPFO procedures?
EPFO will now automatically transfer the customer’s balance to their new organization upon changing jobs, eliminating the need for account holders to request PF amount transfers.
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