NEW DELHI: In the union budget tabled in parliament on Tuesday, Finance Minister Nirmala Sitharaman provided no significant relief to the middle class by offering steep tax cuts for salaried employees earning more than ₹10 lakhs, with just minor tweaks in the standard deductions. The revised income tax under the new regime only adds a 5% tax formula to those with incomes between ₹3-7 lakhs, but other slabs remain the same as last year. The standard deduction has been reduced to: 50,000 for salaried individuals and pensioners.
FLASH: Union Finance Minister Nirmala Sitaraman announced new income tax slabs as follows#UnionBudget2024 #NirmalaSitharaman #Budget2024 #IncomeTaxSlab pic.twitter.com/7Z2j3cKjG7
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The Finance Minister also revised the income tax slabs, which now are:
- Income up to ₹3 lakh: 0% tax
- Income from ₹3 lakh to ₹7 lakh: 5% tax
- Income from ₹7 lakh to ₹10 lakh: 10% tax
- Income from ₹10 lakh to ₹12 lakh: 15% tax
- Income from ₹12 lakh to ₹15 lakh: 20% tax
- Income above ₹15 lakh: 30% tax
The standard deduction is a fixed amount that taxpayers can deduct from their taxable income without requiring receipts or proofs of expenses. This increase is aimed at reducing taxable income, thereby lowering overall tax liability and providing greater financial relief to individuals.
This change follows last year’s budget, which initially set the standard deduction at ₹50,000 for salaried individuals and pensioners. Under the new tax regime, this deduction applies automatically unless taxpayers choose to opt out. The revised standard deduction of ₹75,000 represents a substantial increase that will benefit many taxpayers.
In addition to the enhanced standard deduction, Sitharaman announced an increase in the income threshold eligible for tax relief under Section 87A, which has been raised to ₹7 lakh. This change is expected to extend tax relief to a broader segment of the population, further easing the tax burden on individuals.
These updated tax slabs aim to make the new tax regime more beneficial for salaried individuals by providing more significant savings and reducing the overall tax burden. The government’s move reflects its ongoing efforts to support economic stability and enhance financial relief for taxpayers.