Budget 2024: Tabling the Union Budget 2024-25 in Parliament, Union Finance and Corporate Affairs Minister Nirmala Sitharaman announced significant changes in personal income tax rates for the fiscal year 2024-25 to reduce the tax outgo of the masses.
The Finance Minister has provided relief to taxpayers by revising the income tax slabs for the current fiscal year. Under the new regime, individuals will continue to pay no tax on incomes up to ₹3 lakh, mirroring the previous year’s structure.
Income ranging from ₹3 lakh to ₹7 lakh will now attract a 5% tax rate, previously applicable to income between ₹3 lakh and ₹6 lakh.
Income levels between ₹7 lakh and ₹10 lakh will face a 10% tax rate, previously applied to income between ₹6 lakh and ₹9 lakh. For incomes between ₹10 lakh and ₹12 lakh, the tax rate has been set at 15%, whereas the previous range was ₹9 lakh to ₹12 lakh. Tax rates remain unchanged for incomes between ₹12 lakh and ₹15 lakh at 20% and for incomes above ₹15 lakh at 30%. The Finance Minister presented the first Union Budget of the Modi 3.0 government and her record-seventh consecutive one during the Monsoon Session of Parliament. The budget session of Parliament began on July 22 and, according to schedule, will end on August 12. The finance minister added that salaried employees under the new tax regime will save up to ₹17,500 annually in taxes due to the changes proposed in the FY25 Budget.
FM Sitharaman made two announcements regarding the new tax regime:
-The standard deduction for salaried employees is proposed to be increased from ₹50,000 to ₹75,000. Deduction on family pension for pensioners is proposed to be enhanced from ₹ 15,000 to ₹ 25,000.
“This will provide relief to about four crore salaried individuals and pensioners,” Nirmala Sitharaman said.
The government raised the deduction limit to 14 percent from 10 percent for employers’ contribution to the National Pension System (NPS). This means a non-government employee in the new tax regime will now be allowed a deduction of an amount not exceeding 14 percent of the employee’s salary instead of 10 percent earlier.
“As a result of these proposals, revenue of about ₹ 37,000 crore – ₹ 29,000 crore in direct taxes and ₹ 8,000 crore in indirect taxes – will be forgone while revenue of about ₹ 30,000 crore rupees will be additionally mobilised. Thus, the total revenue forgone is about ₹ 7,000 crore annually,” FM Nirmala Sitharaman said.
