Budget 2024: New Tax Regime Slabs To Be Changed, Standard Tax Deduction Raised From 50,000 To 75,000
Standard Deduction Increase: The standard deduction for those under the new tax regime has been raised from ₹50,000 to ₹75,000.
In a significant move to streamline the tax structure and provide relief to taxpayers, the Government has announced revised income tax slabs in the Budget 2024. The new tax regime aims to simplify the tax system and make it more equitable for different income groups. Here are the details of the new income tax slabs:
Income up to ₹3 lakh: No tax
Income from ₹3 lakh to ₹7 lakh: 5%
Income from ₹7 lakh to ₹10 lakh: 10%
Income from ₹10 lakh to ₹12 lakh: 15%
Income from ₹12 lakh to ₹15 lakh: 20%
Income above ₹15 lakh: 30%
Finance Minister Nirmala Sitharaman highlighted the changes in her speech, stating, “Coming to Personal Income Tax Rates, I have two announcements to make for those opting for the new tax regime. First, the standard deduction for salaried employees is proposed to be increased from ₹50,000/- to ₹75,000/-. Similarly, the deduction on family pension for pensioners is proposed to be enhanced from ₹15,000/- to ₹25,000/-. This will provide relief to about 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 ₹17,500/- in income tax.”
The revised slabs are expected to benefit a broad section of the population, from lower-income earners to higher-income individuals. By reducing the tax rates for certain income brackets and maintaining higher rates for the top earners, the government seeks to promote economic growth and stability.
Nirmala Sitharaman also mentioned, “As a result of these proposals, revenue of about ₹37,000 crore – ₹29,000 crore in direct taxes and ₹8,000 crore in indirect taxes – will be forgone while revenue of about ₹30,000 crore rupees will be additionally mobilized. Thus, the total revenue forgone is about ₹7,000 crore annually.”
These changes reflect the government's efforts to provide more disposable income in the hands of taxpayers, encouraging savings and investment. The revised tax slabs will come into effect from the next financial year, providing taxpayers ample time to plan their finances accordingly. This move is part of the broader economic reforms introduced in Budget 2024, aimed at fostering sustainable growth and development.