Page 14 - ICAI UAE TAX UPDATE_MAY 2024

5 OTHER TAX UPDATES

5.1 Income Tax Slab Rates - Amendment (Income Tax Act, 1961)

While the Finance Act 2024 makes some amendments India’s finance ministry has clarified that there will be no
to income-tax provisions, such as the treatment of additional changes to the income tax regime (new and
agricultural income, the country’s finance ministry old) in the new financial year starting April 1, 2024 (FY
maintains there will be no changes to the direct tax 25).
regime in India for FY 2024–25, i.e., from April 1, 2024. In the Interim Budget for 2024-25, announced on
February 1 this year, India’s finance minister Nirmala
Amendments to indirect taxation under the Finance Sitharaman made no recommendations for changes to
Act 2024, which generally puts into implementation the tax structure, either direct or indirect. As such, the
Interim Budget 2024 provisions, include updates to the income tax slabs set in the Union Budget for 2023–24
Central Goods and Services Tax Act, 2017 concerning continue to apply to both the old and new regimes.
Input Service Distributors and penalties for the failure
to register certain machines used in the manufacture of
goods under special procedures.

New Tax Regime 115BAC (1A) introduced for FY 2023-24 Existing Old Regime (INR)
(INR)

0-0.3 million 0% 0-0.25 million 0%

0.3-0.6 million 5% 0.25-0.5 million 5%

0.6-0.9 million 10% 0.5-1 million 20%

0.9-1.2 million 15% Above 1 million 30%

1.2-1.5 million 20%

Above 1.5 million 30%

• The new tax regime is applicable to individuals other
than companies and firms, as a default regime from FY
2023-24, and the assessment year corresponding to this
– AY 2024-25.
• Under the new tax regime, the tax rates are significantly
lower, though the benefit of various exemptions and
deductions (other than the standard deduction of
INR 50,000 (approx. US$699.04) from salary and INR
15,000 (approx. US$179.86) from family pension) is not
available, as in the old regime.
• While the new tax regime is the default tax regime,
taxpayers are free to select the tax system that best suits
their needs.
• The option of opting out of the new tax regime is
available until the filing of the return for AY 2024-25.
Eligible persons without any business income will have
the option to choose the regime for each financial year.
Thus, they can choose a new tax regime in one financial
year and an old tax regime in another, and vice versa.
14 www.icaidubai.org

UA E TAX UPD ATE NEWSLET TER ISSUE 02 - May 2024