Budget 2024: I-T Slabs Revised Again, Standard Deduction Increased to Rs75,000 under New Tax Regime

Moneylife Digital Team 26 July 2024

While again revising the income-tax (I-T) slabs for individual taxpayers, Union finance minister (FM) Nirmala Sitharaman increased the standard deduction under the new tax regime to Rs75,000 from Rs50,000. Similarly, the FM proposed an enhanced deduction from Rs15,000 to Rs25,000 on family pensions for pensioners which will provide relief to four crore salaried individuals and pensioners.

As per the revised tax slab, there will be no tax for income of up to Rs3 lakh. For income between Rs3 lakh and Rs7 lakh, the new tax rate would be 5%. For Rs7 lakh to Rs10 lakh, it will be 10%.

For all other income slabs, there are no changes. Income between Rs10 lakh and Rs12 lakh will continue to attract 15% tax. For incomes of Rs12 lakh to Rs15 lakh, the tax remains 20%, while incomes above Rs15 lakh will continue to be charged 30%.

In the Budget speech, the FM made two announcements for those taxpayers opting for the new tax regime. "In the new tax regime, the standard deduction of salaried employees is to be increased from Rs50,000 to Rs75,000. Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs15,000 to Rs25,000. This will provide relief to four crore salaried individuals and pensioners."

As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs17,500 annually in income-tax, the FM says.

In the last fiscal, Ms Sitharaman says more than two-thirds of individual taxpayers have availed the new personal income-tax regime. Over 86.1mn (million) I-T returns were filed in FY23-24.

The new tax slabs under thenew I-T regime will be effective1 April 2024.

Rationalisation of Capital Gains

As proposed by Ms Sitharaman, short-term gains on certain financial assets will now attract a tax rate of 20%, while that on all other financial assets and all non-financial assets will continue to attract the applicable tax rate.

The FM says the long-term gains on all financial and non-financial assets will attract a tax rate of 12.5%. For the benefit of the lower and middle-income classes, she proposed to increase the limit of exemption of capital gains on certain financial assets from Rs1 lakh to Rs1.25 lakh per year.

She stated that the listed financial assets held for more than a year will be classified as long-term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.

The unlisted bonds and debentures, debt mutual funds and market-linked debentures, irrespective of the holding period, will attract tax on capital gains at applicable rates, the FM added.

Comments

User

r_ashok41

2 months ago

present govt dictum is kill the middle class by taxing them the maximum .Next time i may not be a surprise if they are stuck in two digits.This budget had been the worse I have seen with nothing for sr citizens or salaried class.Looks like PM has asked FM to kill middle class and sr citizens.

Razia Khan

2 months ago

Middle Class works hard so that they can pay taxes that can be used to give rebate to Rich people and subsidies to poor while no benefits provided by government for Middle Class.

In last 10 years and even before that Middle Class has been exploited class but in last 10 years exploitation is cruelly open and stupid justification given for such actions.

Government knows people don't vote based on work but caste, religion etc., hence they can do anything they like, they don't need 100% peoples vote, just 35% to 40% votes will be enough to come to power.

While in other countries people do protest against government, in India people are happy trolling themselves on social media for voting every time be it any government.

Voters only realize their mistake in Hindsight and all government knows it.

r_ashok41

2 months ago

Slowly the present fm wants to kill old tax regime together with sr citizens and benefits to them with let them die attitude.Whatever benefits were there for sr citizens have been slowly removed like the concessions in trains and the least they could have done is increased the std deductions for sr citizens since already they are burdened with higher cost of basic amenities.Very bad budgets for sr citizens

impaddi

2 months ago

Work, earn, invest (after paying multiple taxes) for government!!! And then beg for survival and living.

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