Budget 2024: Revised Tax Slabs And Increased Standard Deductions By Rs. 25,000

Finance Minister Nirmala Sitharaman announced changes to the new tax regime slabs and an increase in the standard tax deduction from Rs. 50,000 to Rs. 75,000. The standard deduction under the old tax regime will remain at Rs. 50,000. Additionally, the deduction for family pensioners will be raised from Rs. 15,000 to Rs. 25,000 under the new tax regime.

Sitharaman stated that these adjustments will benefit four crore salaried individuals and pensioners.

The Revised Tax Slabs Are:

Up to Rs. 3,00,000: Nil
From Rs. 3,00,001 to Rs. 7,00,000: 5%
From Rs. 7,00,001 to Rs. 10,00,000: 10%
From Rs. 10,00,001 to Rs. 12,00,000: 15%
From Rs. 12,00,001 to Rs. 15,00,000: 20%
Above Rs. 15,00,000: 30%

According to Sitharaman, those opting for the new regime will save ₹17,500. She also announced a thorough review of the Income Tax Act of 1961 to enhance clarity and reduce uncertainty and litigation risks.

Sitharaman emphasized the government’s commitment to simplifying the tax system for individual taxpayers and noted that more than two-thirds of personal taxpayers adopted the new tax regime in the financial year 2023-24.

Additionally, the deduction for employers’ contributions to employees’ basic salaries under the National Pension System (NPS) has been increased from 10% to 14%. This change applies to both public and private sector companies under the new regime.

Drishya Madhur

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