New tax regime: Update! Income tax provided excellent information on the TDS of employees. Note that the new tax section is the default, so if you don’t want to choose the new tax section and want to keep the old one, you can choose the old tax section. Let’s find out all about it.
What new or old tax regime do you want to choose for taxation, now your company will ask you this question. In this regard, the Income Tax Department has recently issued a notification.
The Income Tax Department says that now a company cannot deduct TDS without consulting the employee. To do this, you must obtain the permission of the employee. The TDS will be deducted according to the employee’s choice of tax regime. And based on that you will be paid.
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Note that the new tax section is the default, so if you don’t want to choose the new tax section and want to keep the old one, you can choose the old tax section.
If no regime is selected, then
However, if the employee does not want to opt for any regime, then according to the new tax regime launched in the 2023-24 corporate budget, the employee’s TDS will be waived. However, wage earners have many options for higher deductions and tax breaks. They can get a TDS exemption under any tax slab. For this reason, the company cannot deduct the TDS of any employee without consulting it.
The tax slab and the tax rate of the new tax regime
0% tax on profit of Rs 0-3 lakh
5% tax on Rs 3-6 lakh
10% tax on Rs 6-9 lakh per year
15% tax on profit of Rs 9-12 lakh
20% tax on annual profit of 12-15 lakhs
30% tax on income of Rs 15 lakh or more
Tax Slab and Tax Rate of the Old Tax Regime
No tax will be paid on profits up to 2.5 lakhs
5% income tax from 2.5 sin to 5 lakh
20% tax on income between Rs 5 lakh and Rs 10 lakh
The tax of 30% on the annual income of 10 missings or more