Finance Minister Nirmala Sitharaman announced significant changes to the tax structure in the Budget 2024. The new tax regime slabs have been revised, and the standard tax deduction has been increased from ₹50,000 to ₹75,000. However, the standard deduction under the old tax regime will remain unchanged at ₹50,000. For family pensioners, the deduction will rise from ₹15,000 to ₹25,000 under the new regime.
Revised Tax Slabs
The revised tax slabs under the new regime are as follows:
- Up to ₹3,00,000: Nil
- From ₹3,00,001 to ₹7,00,000: 5%
- From ₹7,00,001 to ₹10,00,000: 10%
- From ₹10,00,001 to ₹12,00,000: 15%
- From ₹12,00,001 to ₹15,00,000: 20%
- Above ₹15,00,000: 30%
Nirmala Sitharaman mentioned that individuals opting for the new regime would save ₹17,500 due to these changes. The Finance Minister also announced a comprehensive review of the Income Tax Act of 1961 to make it easier to understand and reduce litigation.
Benefits and Simplifications
This move is expected to benefit four crore salaried individuals and pensioners. Nirmala Sitharaman emphasized the government’s commitment to simplifying the tax regime for individual taxpayers. More than two-thirds of personal taxpayers availed of the new tax regime in the financial year 2023-24.
Vivaad to Vishwas Scheme 3.0
The Finance Minister also introduced the Vivaad to Vishwas scheme 3.0 for 2024, aiming to resolve tax disputes and provide relief to taxpayers.
National Pension System (NPS) Changes
The deduction on employers’ contribution to employees’ basic salary under the National Pension System (NPS) has been increased from 10% to 14%. This change will apply to both public sector companies and the private sector under the new regime.
These revisions and initiatives reflect the government’s focus on easing the tax burden and making tax compliance more straightforward for individuals and businesses alike.
