To encourage and incentivize taxpayers to transition to the new tax regime, an amendment has been made to insert a proviso in clause (iia) of section 57, wherein deduction in case of income in the nature of family pension has been enhanced, if the taxpayer opts to compute his income tax under the new tax regime.
The enhanced limits after the Finance Act 2024 are depicted as follows: –
| Before Amendment | After Amendment | |||
| Particulars | Opting for Old Scheme | Opting for New Scheme u/s 115BAC | Opting for Old Scheme | Opting for New Scheme u/s 115BAC |
| Limits for deduction | Assessee can claim Family Pension deduction of a sum equal to 33.33% or 15,000 whichever is less. | Assessee can claim Family Pension deduction of a sum equal to 33.33% or 15,000 whichever is less. | Assessee can claim Family Pension deduction of a sum equal to 33.33% or 15,000 whichever is less. | Assessee can claim Family Pension deduction of a sum equal to 33.33% or 25,000 whichever is less. |
This amendment will take effect from the 1st day of April, 2025, and will accordingly apply to assessment year 2025-26 and subsequent assessment years