Budget 2024: Personal income tax slabs, standard deductions revised under new tax regime; check new rates here
XIn sops for the middle class, Finance Minister Nirmala Sitharaman on Tuesday hiked standard deduction by 50 per cent to Rs 75,000 and tweaked tax slabs under the new income tax regime to provide more money in the hands of salaried class. (Pexels/PTI)
CHENNAI: Union Finance Minister Nirmala Sitharaman on Tuesday, while presenting the Union Budget 2024, announced several income tax reforms including a hike in standard deduction by 50 per cent from the current Rs 50,000 to Rs 75,000 and a tweak in tax slabs under the new income tax regime to provide more money in the hands of salaried class, with a view to boost consumption.
She said salaried employees in the new tax regime could save up to Rs 17,500 in income tax annually following the changes announced in the Budget.
The standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000 annually.
Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000 to Rs 25,000.
"This will provide relief to about four crore salaried individuals and pensioners," Sitharaman said in her Budget speech.
Income of up to Rs 3 lakh will continue to be exempted from income tax under the new regime.
The new tax slabs under the new income tax regime will be effective from April 1, 2024. (Assessment Year 2025-26).
Here are the revised tax slabs under the New Regime:
Here is a comparison of the tax rates under both regimes:
As per the Budget proposal, a 5 per cent tax will be levied on income between Rs 3-7 lakh, 10 per cent between Rs 7-10 lakh, 15 per cent for Rs 10-12 lakh. However, 20 per cent tax will continue to be levied on income between Rs 12-15 lakh and 30 per cent for income above Rs 15 lakh.
Under the existing new I-T regime, a 5 per cent tax is levied on income between Rs 3-6 lakh, 10 per cent for income between Rs 6-9 lakh.
Income between Rs 9-12 lakh and Rs 12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively.
A 30 per cent I-T would be applicable on income above Rs 15 lakh.
(With inputs from PTI)