Budget 2024: Tax structure under new regime revised

Finance Minister Nirmala Sitharaman tabled the Union Budget 2024 for the seventh time today. In her budget speech Shri Nirmala Sitharaman revamped income tax slabs under the new regime in Union Budget 2024 in a bid to make it more attractive. The standard deduction limit was also hiked from Rs 50,000 to Rs 75,000, marking an increase of Rs 25,000.

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The Finance Minister said that the tweaked tax slabs would save salaried individuals Rs 17,500 annually under the new regime. Additionally, the Finance Minister adjusted some of the tax slabs.

The updated tax slabs are as follows: income up to Rs 3 lakh will be taxed at 0%, Rs 3 lakh to Rs 7 lakh at 5%, Rs 7 lakh to Rs 10 lakh at 10%, Rs 10 lakh to Rs 12 lakh at 15%, Rs 12 lakh to Rs 15 lakh at 20%, and income above Rs 15 lakh at 30%.

Earlier, under the new income tax regime, there was no tax up to Rs 3 lakh income, Rs 6 lakh to Rs 9 lakh was taxed at 10%, Rs 9 lakh to Rs 12 lakh was taxed at 15%, 12 lakh to Rs 15 lakh at 20% and Rs 15 lakh and above at 30%.

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Specifically, the changes have been made in three slab categories – Over Rs 3 lakh to Rs 6 lakh at 5% has become Rs 3 lakh to Rs 7 lakh, Rs 6 lakh to Rs 9 lakh at 10 % has now become Rs 7 lakh to Rs 10 lakh and over Rs 9 lakh to Rs 12 lakh at 15% has become Rs 10 lakh to Rs 12 lakh.

These changes are likely to provide a big boost to middle class taxpayers.

The government has also increased the deduction limit for employers’ contributions to the National Pension System (NPS) from 10% to 14%.

Moreover, the deduction for family pensions is proposed to increase from Rs 15,000 to Rs 25,000, benefiting around 4 crore salaried individuals and pensioners.