Union Budget 2024: Finance Minister Introduces New Income Tax Slabs and Enhanced Standard Deductions
Desk Report, July 24, 2024: Finance Minister Nirmala Sitharaman has unveiled significant changes to the income tax regime in her Union Budget 2024 speech. The new provisions include revised income tax slabs for FY 2024-25 and an increase in the standard deduction.
The standard deduction has been raised from Rs 50,000 to Rs 75,000. Additionally, the tax slab for the 5% tax rate has been adjusted, now covering income from Rs 5 lakh to Rs 7 lakh. There is a complete overhaul of the capital gains tax regime, with tax rates being increased.
No changes were made to the old income tax regime, as the government aims to promote the new one. The revised income tax slabs are as follows:
– Income up to Rs 3 lakh: No tax
– Income from Rs 3 lakh to Rs 7 lakh: 5% tax rate
– Income from Rs 7 lakh to Rs 10 lakh: 10% tax rate
– Income from Rs 10 lakh to Rs 12 lakh: 15% tax rate
– Income from Rs 12 lakh to Rs 15 lakh: 20% tax rate
– Income above Rs 15 lakh: 30% tax rate
To enhance social security benefits, the deduction of employer contributions towards the National Pension System (NPS) is proposed to increase from 10% to 14% of the employee’s salary. This deduction, up to 14% of salary, will also apply to employees in the private sector, public sector banks, and undertakings opting for the new tax regime.
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