Income Tax Deduction from Salaries during FY 2024-25

Here are the key highlights:

1. Changes in Salary Definition & Perquisites

The Finance Act, 2023, includes the contribution made by the Central Government to the Agniveer Corpus Fund in the definition of salary.

Perquisites now include:

Rent-free accommodation provided by the employer. Accommodation at concessional rates.

2. Surcharge Rates (Old Tax Regime)

• Income between ₹50 lakh - ₹1 crore: 10% surcharge
• Income between ₹1 crore - ₹2 crore: 15% surcharge
• Income between ₹2 crore - ₹5 crore (excluding dividend and capital gains): 25% surcharge
• Income above ₹5 crore (excluding dividend and capital gains): 37% surcharge
• Income above ₹2 crore (including dividend & capital gains): 15% surcharge

3. New Tax Regime Slabs for FY 2024-25

Income Range (₹) -------------------- Tax Rate (%)

• Up to 3,00,000 -------------------- Nil
• 3,00,001 - 7,00,000 ---------------- 5%
• 7,00,001 - 10,00,000 -------------- 10%
• 10,00,001 - 12,00,000 -------------- 15%
• 12,00,001 - 15,00,000 -------------- 20%
• Above 15,00,000 -------------------- 30%

Standard Deductions in New Tax Regime:

• ₹50,000 deduction allowed.
• No deductions/exemptions except NPS (Section 80CCD(2)) and Agniveer Corpus Fund (80CCH).

4. Tax Rebate under Section 87A

• Old Tax Regime: Full rebate for income up to ₹5,00,000 (₹12,500 max rebate).
• New Tax Regime: Full rebate for income up to ₹7,00,000 (₹25,000 max rebate).

5. Leave Encashment Exemption for Non-Govt Employees

Maximum exemption limit for leave encashment at retirement raised to ₹25,00,000.

6. Changes to Form 16 & Form 24Q

Health and Education Cess replaces Education Cess in Form 24Q. New column added in Form 24Q (Annexure-II) for TDS deducted under other sections.

7. Penalties for TDS Defaults

• Failure to deduct TDS (Sec 271C): Penalty = Unpaid TDS amount.
• Failure to deposit TDS (Sec 276B): Rigorous imprisonment (3 months to 7 years) + Fine.
• New proviso: No prosecution if TDS is paid before filing TDS return.