Finance Minister Nirmala Sitharaman, in the Union Budget 2024 presented on July 23, 2024, announced significant changes to the new tax regime, applicable from FY 2024-25. The revised tax slabs aim to provide substantial relief to taxpayers. Here’s a detailed overview of the updated slab rates and other notable changes:
New Tax Regime Slab Rates
| Total Income (₹) | Rate of Tax (%) |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,001 to 7,00,000 | 5 |
| 7,00,001 to 10,00,000 | 10 |
| 10,00,001 to 12,00,000 | 15 |
| 12,00,001 to 15,00,000 | 20 |
| Above 15,00,000 | 30 |
Note: There are no changes in the old tax regime.
Enhanced Deductions in the New Tax Regime
A.2 Standard Deduction
- Current: ₹50,000
- Proposed: ₹75,000
- Beneficiaries: Salaried individuals and pensioners
A.3 Family Pension Deduction
- Current: ₹15,000
- Proposed: ₹25,000
- Beneficiaries: Individuals receiving family pension
A.4 Non-Government Employer Contribution to New Pension Scheme
- Current Deduction Limit: 10% of the salary
- Proposed Deduction Limit: 14% of the salary
- Implication: Non-government employees can now avail a deduction up to 14% of their salary, enhancing their retirement savings significantly.
These changes are aimed at increasing disposable income and encouraging savings among the salaried and pensioner populations. By restructuring the tax slabs and enhancing deductions, the government aims to simplify the tax system and provide relief to middle-class taxpayers, fostering a more inclusive and balanced economic growth.
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