Income Tax Slabs 2024-25 Budget Updates: Changes in New Regime

Finance Minister Nirmala Sitharaman announced several changes to the new income tax regime in her Union Budget 2024 speech. Key updates include:

• New Income Tax Slabs for FY 2024-25
• Hike in Standard Deduction: Increased from Rs 50,000 to Rs 75,000
• Tax Slab Adjustment: The 5% tax rate now applies to income up to Rs 7 lakh, raised from Rs 5 lakh
• Revamped Capital Gains Tax Regime: Increased tax rates

No changes were announced for the old income tax regime as the government aims to incentivize the new regime.

Key Expectations Not Met:

• A proposal to raise the 30% tax rate threshold from Rs 15 lakh to Rs 20 lakh was anticipated to benefit the middle class but still needs to be implemented.
• Changes in Section 80C, Section 80D, and Section 80TTA for savings and investments, medical insurance, and interest on bank deposits were expected but have yet to materialize.
• Additional benefits for senior citizens, such as a higher basic exemption limit under the new tax regime, were also anticipated but have yet to occur.

Income Tax Budget 2024 Updates: Understanding the Tax Changes

The Finance Minister has announced major changes in personal taxes, aiming to benefit the middle class and pensioners. Under the new tax regime, the personal income tax standard deduction will increase from Rs 50,000 to Rs 75,000, and the deduction for family pensions will rise from Rs 15,000 to Rs 25,000. Additionally, the revised tax slabs in the new regime are expected to result in tax savings of Rs 17,500 for individuals.

Taxpayers to Save Rs 17,500!

Regarding Personal Income Tax Rates, I have two announcements for those opting for the new tax regime. First, the standard deduction for salaried employees will be increased from Rs 50,000 to Rs 75,000. Similarly, the deduction on family pensions for pensioners will be enhanced from Rs 15,000 to Rs 25,000. This will provide relief to about four crore salaried individuals and pensioners.

Secondly, the tax rate structure in the new tax regime is proposed to be revised as follows:

·  Income up to Rs 3 lakh: NIL tax
·  Income from Rs 3 to 7 lakh: 5% tax
·  Income from Rs 7 to 10 lakh: 10% tax
·  Income from Rs 10 to 12 lakh: 15% tax
·  Income from Rs 12 to 15 lakh: 20% tax
·  Income above Rs 15 lakh: 30% tax
 

Due to these changes, a salaried employee in the new tax regime can save up to Rs 17,500 in income tax," said Finance Minister Nirmala Sitharaman.