Finance Minister Nirmala Sitharaman has presented her seventh budget (Union Budget 2024). From the point of view of income tax payers, there is no new announcement for one-third of the people. There is a change in the slab for two-thirds of the people. The Finance Minister said in the budget speech that about two-thirds of the people have adopted the new tax regime. He made two important announcements related to the new tax regime.
One, the limit of standard deduction for employed people has been increased from Rs 50 thousand to Rs 75 thousand. That is, Rs 25000 will be reduced from their taxable income. The Finance Minister also increased this exemption from Rs 15000 to Rs 25000 for taxpayers receiving family pension. Nirmala Sitharaman's second announcement was related to changes in slabs. She announced changes in three slabs in the new tax regime.
Budget 2024: New income tax vs old income tax regime comparison
| Year 2023 | Tax rate | Before Budget 2024 | Tax |
|---|---|---|---|
| 3 to 6 lakh rupees | 5 % | 3 to 7 lakh rupees | 5% |
| 6 to 9 lakh rupees | 10% | 7 lakh rupees to 10 lakh rupees | 10% |
| 9 lakh to 12 lakh rupees | 15% | 10 lakh rupees to 12 lakh rupees Upto | 15% |
| 12 lakh to Rs 15 lakh | 20% | 12 lakh to Rs 15 lakh | 20% |
| More than Rs 15 lakh | 30% | Rs 15 lakh | 30% |
Those earning less than Rs 1 lakh will get Rs 3 thousand: If your annual salary is less than Rs 1 lakh, then the government will give you Rs 3 thousand monthly. This amount will be given by the government.
Budget 2024: New Tax Regime Vs Old Tax Regime
The new tax regime was introduced in 2020. In the initial years, most people did not adopt this regime. The government has been continuously trying to make it popular. Even in the 2023 budget, the five tax relief measures announced by Finance Minister Nirmala Sitharaman were related to the new tax regime.
In the old tax regime, you can claim exemption in about two dozen items. In the new tax regime, it is only 11. There is no provision for exemption in many items including HRA, LTA, 80 (C), 80 (D) in the new tax regime.
After the change in income tax slab and standard deduction, taxpayers will get a benefit of up to Rs 17,500. Earlier, the tax on the income of Rs 15.75 lakh from salary was Rs 1 lakh 57 thousand 500. Now after these changes, the tax will be Rs 1 lakh 40 thousand.
Budget 2024: New tax regime
- This time, zero rate has been kept for people having annual income up to Rs 3 lakh.
- People whose income is between Rs 3 lakh to Rs 7 lakh have been kept under the 5 percent tax bracket.
- If your income is between Rs 7 lakh to Rs 10 lakh, then you will have to pay 10 percent tax.
| Tax Slabs | Rates |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 300,001 to Rs. 7,00,000 | 5% (Tax exemption under section 87A) |
| Rs. 7,00,001 to Rs. 10,00,000 | 10% (Tax exemption up to Rs. 7 lakh under section 87A) |
| Rs. 10,00,001 to Rs. Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Budget 2024: Old tax rate regime
- Earlier, there was no tax on annual income up to Rs 3 lakh.
- If your income was between Rs 3 lakh and Rs 6 lakh, then you had to pay 5% tax.
- If your annual income was between Rs 6 lakh and Rs 9 lakh, then you had to pay 10% tax.
- For annual income between Rs 9 lakh and Rs 12 lakh, the tax rate was fixed at 15%.
| Tax Slabs | Rates |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 300,001 to Rs. 6,00,000 | 5% (Tax exemption under section 87A) |
| Rs. 6,00,001 to Rs. 900,000 | 10% (Tax exemption up to Rs. 7 lakh under section 87A) |
| Rs. 9,00,001 to Rs. Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 1500,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Also Read: Budget Session 2024: PM Modi told what the budget of 2024 would be like
About the Author:
Kaif Ansari