Comprehensive Guide to 2024 Income Tax Slabs Under the Old Regime

The Indian income tax system has undergone significant changes over the years, yet the old tax regime continues to be a preferred choice for many taxpayers due to its extensive range of deductions and exemptions. Understanding the income tax slabs under the old regime is essential for effective tax planning and maximising savings. This comprehensive guide delves into the 2024 income tax slabs for the old regime and explores various financial products and services that can help you optimise your tax liability.

Understanding the old regime

The old regime allows taxpayers to claim numerous deductions and exemptions, such as those for investments in specified financial products, home loans, insurance premiums, and medical expenses. The tax slabs under this regime are progressive, meaning the rate of taxation increases with the level of income.

Income tax slabs for 2024

For the financial year 2024-25, the income tax slabs under the old regime are as follows:

1. For individuals below 60 years of age
   • Income up to Rs. 2,50,000: No tax
   • Income from Rs. 2,50,001 to Rs. 5,00,000: 5% of the income exceeding Rs. 2,50,000
   • Income from Rs. 5,00,001 to Rs. 10,00,000: Rs. 12,500 + 20% of the income exceeding Rs. 5,00,000
   • Income above Rs. 10,00,000: Rs. 1,12,500 + 30% of the income exceeding Rs. 10,00,000
2. For senior citizens (60 to 80 Years)
   • Income up to Rs. 3,00,000: No tax
   • Income from Rs. 3,00,001 to Rs. 5,00,000: 5% of the income exceeding Rs. 3,00,000
   • Income from Rs. 5,00,001 to Rs. 10,00,000: Rs. 10,000 + 20% of the income exceeding Rs. 5,00,000
   • Income above Rs. 10,00,000: Rs. 1,10,000 + 30% of the income exceeding Rs. 10,00,000
3. For super senior citizens (Above 80 Years)
   • Income up to Rs. 5,00,000: No tax
   • Income from Rs. 5,00,001 to Rs. 10,00,000: 20% of the income exceeding Rs. 5,00,000
   • Income above Rs. 10,00,000: Rs. 1,00,000 + 30% of the income exceeding Rs. 10,00,000

Surcharge and cess

• Surcharge: Applicable for individuals with income exceeding Rs. 50,00,000 as follows:
  • 10% of income tax for income above Rs. 50,00,000 up to Rs. 1,00,00,000
  • 15% of income tax for income above Rs. 1,00,00,000 up to Rs. 2,00,00,000
  • 25% of income tax for income above Rs. 2,00,00,000 up to Rs. 5,00,00,000
  • 37% of income tax for income above Rs. 5,00,00,000
• Health and Education Cess: 4% of income tax and surcharge

Maximising tax benefits

To maximise tax benefits under the old regime, consider the following deductions and exemptions:

1. Section 80C - Investments and savings: Section 80C allows for deductions up to Rs. 1,50,000 per annum on various investments and expenses. Eligible instruments include:
   • Public Provident Fund (PPF)
   • Employee Provident Fund (EPF)
   • National Savings Certificate (NSC)
   • Life Insurance Premiums
   • Tax-saving Fixed Deposits
   • Equity Linked Savings Scheme (ELSS)
   • Principal repayment on home loans
2. Home loan benefits: Home loans offer significant tax benefits under the old regime. Deductions are available under different sections:
   • Section 24(b): Interest paid on home loans is deductible up to Rs. 2,00,000 per annum.
   • Section 80C: Principal repayment is eligible for deduction up to Rs. 1,50,000 per annum.
3. Health insurance - Section 80D: Premiums paid for health insurance policies are deductible under Section 80D:
   • Self, spouse, and children: Up to Rs. 25,000 per annum
   • Parents (below 60 years): Additional Rs. 25,000 per annum
   • Parents (above 60 years): Additional Rs. 50,000 per annum
4. Education loan - Section 80E: Interest on education loans is fully deductible under Section 80E. This deduction is available for a maximum of 8 years or until the interest is fully paid, whichever is earlier.
5. Donations - Section 80G: Donations to specified charitable institutions and relief funds are deductible under Section 80G. The deduction can be 50% or 100% of the amount donated, depending on the institution.
6. Savings account interest - Section 80TTA: Interest earned on savings accounts is deductible up to Rs. 10,000 per annum under Section 80TTA for individuals below 60 years.

Financial products for tax savings

Incorporating various financial products into your portfolio can help optimize tax savings under the old regime. Here are some options:

1. Fixed Deposits: Tax-saving fixed deposits offer a safe investment with a lock-in period of 5 years. They provide a deduction under Section 80C up to Rs. 1,50,000.
2. National Pension System (NPS): Contributions to the NPS are eligible for additional deduction up to Rs. 50,000 under Section 80CCD(1B), over and above the Rs. 1,50,000 limit of Section 80C.
3. Mutual Funds: ELSS mutual funds offer the dual benefits of potential high returns and tax savings under Section 80C. They come with a lock-in period of 3 years, the shortest among tax-saving investments.
4. Insurance plans: Life and health insurance plans not only provide financial security but also offer tax benefits. Premiums paid towards these plans are eligible for deductions under Section 80C and Section 80D, respectively.
5. Public Provident Fund (PPF): PPF is a long-term investment option with a 15-year maturity period. It offers tax-free returns and the contributions are deductible under Section 80C.
6. Tax-free bonds: Investing in tax-free bonds can provide tax-free interest income, making them a suitable option for high-income earners.

Understanding and leveraging the income tax slabs under the old regime can significantly reduce your tax liability. By strategically investing in various financial products and availing of the available deductions, you can maximise your savings and achieve your financial goals.