New Rules for TDS on Salary post Budget 2024:

New Rules for TDS on Salary post Budget 2024 The Union Budget 2024 proposed several important changes to the tax deduction at source (TDS) on salaries, particularly in the new tax regime. While the old regime remains identical, the new regime has undergone several changes focused on bringing taxpayer relief. The most important amendments and implications are listed below.

New Tax Regime Slab Rates for FY 2024-25

The slab rates of the new tax regime have been revised for the financial year 2024-25. The updated slabs are as follows:

Particular	New Tax Regime
	Income Ranges	Rate
Slab Rate	0-3L	0%
	3L - 7L	5%
	7L -10L	10%
	10L - 12L	15%
	12L -15L	20%
	Above 15L	30%

Standard Deduction Increased

The standard deduction has been raised from Rs.50,000 to Rs.75,000 under the new tax regime.

Exemption Limit of Family Pension Increased

The deduction under Section 57 has been enhanced from Rs.15,000 to Rs.25,000 under the New Tax Regime.

Employer’s Contribution to Pension Fund

The employer's contribution limit to the pension fund under Section 80CCD(2), which is deductible under both the old and new regimes, has been raised to 14% from 10% of the salary.

Change in Section 192: TDS Deduction Based on TCS Collection

A new rule has been added, which states that if TCS (Tax Collected at Source) is collected from an employee on any transaction and declared to the employer, the employer must include this TCS for TDS deduction on salary. Previously, the employer simply evaluated TDS deducted.

Old Tax Regime Slab Rates for FY 2024-25

Particular	Old Tax Regime		Old Tax Regime		Old Tax Regime
	Individuals		Senior Citizens (60 to 80 Years)		Senior Citizens (Above 80 Years)
	Income Ranges	Rate	Income Ranges	Rate	Income Ranges	Rate
Slab Rate	0-2 Lakh	0%	0-3 Lakh	0%	0-5 Lakh	0%
	2.5L -5L	5%	3L -5L	5%	5L -10L	20%
	5L -10L	20%	5L -10L	20%
	Above 10L	30%	Above 10L	30%	Above 10L	30%

Rebate Under Section 87A

This is only available to resident individuals, not non-resident individuals or anybody else. Under Old Tax Regime: Only if total income is not above Rs.500000, rebate shall be provided up to Rs.12500. Under New Tax Regime: Only if total income does not exceed Rs.700,000, a rebate of up to Rs.25000 is available. Important Note:

• Rebate from LTCG shall not be authorized under section 112A.
• Not allowed to HUF.
• Not permitted to NR.
• Allowed for LTCG/STCG u/s 111A, casual income (ex. lottery) - under the old regime only.

Let's understand all these changes with Examples. Example 1: Standard Deduction and New Slab Rates Scenario: Annual salary: Rs.12,00,000 Applicable under the new regime Calculation: Gross Salary: Rs.12,00,000 Standard Deduction: Rs.75,000 Taxable Income: Rs.12,00,000 – Rs.75,000 = Rs.11,25,000 Tax Computation: Up to Rs.3,00,000: Nil Rs.3,00,001 to Rs.7,00,000: 5% of Rs.4,00,000 = Rs.20,000 Rs.7,00,001 to Rs.10,00,000: 10% of Rs.3,00,000 = Rs.30,000 Rs.10,00,001 to Rs.11,25,000: 15% of Rs.1,25,000 = Rs.18,750 Total Tax Payable: Rs.20,000 + Rs.30,000 + Rs.18,750 = Rs.68,750 So TDS is to be deducted in the whole year based on this in equal amount. Example 2: TDS Deduction Considering TCS Scenario: Annual salary: Rs.10,00,000 TCS collected: Rs.5,000 Employee declares TCS to the employer Calculation: Gross Salary: Rs.10,00,000 Standard Deduction: Rs.75,000 Taxable Income: Rs.10,00,000 – Rs.75,000 = Rs.9,25,000 Tax Computation: Up to Rs.3,00,000: Nil Rs.3,00,001 to Rs.7,00,000: 5% of Rs.4,00,000 = Rs.20,000 Rs.7,00,001 to Rs.9,25,000: 10% of Rs.2,25,000 = Rs.22,500 Total Tax Payable: Rs.20,000 + Rs.22,500 = Rs.42,500 TDS Deduction Adjustment: TCS Declared: Rs.5,000 Adjusted TDS Deduction: Rs.42,500 – Rs.5,000 = Rs.37,500 So TDS is to be deducted in the whole year based on this in equal amount.