The New Tax Regime was first announced in 2020 which saw only a few takers. Before the introduction of the New Tax Regime, there was only one Regime – the Old Tax Regime. More recently, the New Tax Regime was again updated in the Union Budget 2023. These changes will come into effect for the financial year 2023-24, or simply FY24, which also translates to assessment year 2024-25.
Finance Minister Nirmala Sitharaman in her this year’s Budget speech said that the new tax regime will be treated as the default tax regime if the employer doesn’t register his or her choice with the employee.
In the Union Budget 2023, Finance Minister Nirmala Sitharaman announced significant adjustments to the new income tax regime, including reduced tax rates and a tax rebate on annual income up to ₹7 lakh.