Union Budget 2024: New Tax Regime Slabs Changed, Standard Deduction Up From ₹ 50,000 To 75,000

New Delhi: Finance Minister Nirmala Sitharaman has announced significant changes to the new tax regime as part of the Union Budget 2024. One of the key highlights is the increase in the standard deduction from ₹ 50,000 to ₹ 75,000. This change is expected to provide substantial tax relief for salaried individuals.

New Tax Regime Slabs for 2024

The Finance Minister also unveiled revisions to the tax slabs under the new regime. The updated slabs are as follows:

• Income up to ₹ 3 lakh: Nil
• ₹ 3 lakh to ₹ 6 lakh: 5%
• ₹ 6 lakh to ₹ 9 lakh: 10%
• ₹ 9 lakh to ₹ 12 lakh: 15%
• ₹ 12 lakh to ₹ 15 lakh: 20%

Above ₹ 15 lakh: 30%

With these changes, salaried employees can save as much as ₹ 17,500 in the new tax regime. The increase in standard deduction was highly anticipated, and although some experts speculated it could double to ₹ 1,00,000, the actual increase still offers notable benefits.

Benefits for Pensioners and Middle-Class Taxpayers

In addition to the changes in the new tax regime, the deduction on family pension for pensioners will rise from ₹ 15,000 to ₹ 25,000. These adjustments are designed to bring relief to around four crore salaried individuals and pensioners.

The changes to income tax slabs were a focal point ahead of Ms. Sitharaman's budget speech, especially as the country's vast middle class sought relief from tax burdens. The interim budget projected a gross tax revenue of ₹ 38.31 lakh crore for 2024-25, reflecting an 11.46% growth over the previous fiscal year.

Capital Gains Tax and Angel Tax Abolishment

Capital Gains Tax: Short-term gains on certain financial assets will now be taxed at 20%, while long-term gains on all financial and non-financial assets will be taxed at 12.5%. Listed financial assets held for over a year are now classified as long-term.

Angel Tax Abolished: In a move to support the startup ecosystem, the government has abolished the angel tax for all classes of investors. This tax was previously levied on capital raised via issue of shares by unlisted companies from Indian investors if the share price exceeded the fair market value.

Other Tax Reforms

Ms. Sitharaman proposed a simplified tax regime for foreign shipping companies operating domestic cruises to boost cruise tourism. Additionally, a comprehensive review of the Income Tax Act of 1961 was announced to make it more understandable and reduce litigation. Key proposals include:

• Reopening assessments within three years for escaped income of ₹ 50 lakh and over.
• Reducing the time limit for search cases from 10 years to six.
• Simplifying the tax regime for charities, TDS rate structure, reassessment provisions, and capital gains taxation.
• Merging two tax exemption regimes for charities into one.
• Reducing the TDS rate on e-commerce operators from 1% to 0.1%.
• Decriminalizing delays in TDS payment up to the due date of filing the concerned statement.

These reforms are intended to streamline tax processes and provide greater clarity for taxpayers.

News Source:- ndtv.com