The government has raised the Standard Deduction ceiling to Rs 75,000, allowing salaried individuals to save up to Rs 17,500 in taxes under the new regime. This increase from Rs 50,000 was generally expected, with hopes for a hike to Rs 1 lakh.
In addition, Finance Minister Nirmala Sitharaman recommended boosting the long-term capital gains tax from 10% to 12.5% in the 2024-25 budget. A full revision of the Income Tax Act has also been announced, with the goal of simplifying taxes regulations and potentially providing more relief to taxpayers, hence increasing discretionary income.
New Income Tax Slab
| Income | Income tax % |
| Up to Rs 3 lakh | 0% |
| Rs 3 lakh to Rs 7 lakh | 5% |
| Rs 7 lakh to Rs 10 lakh | 10% |
| Rs 10 to Rs 12 lakh | 15% |
| Rs 12 to Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
The new tax slabs under the new income tax regime will take effect on April 1, 2024.
Old Income Tax Slab
| Income | Income tax % |
| Up to Rs 3 lakh | 0% |
| Rs 3 lakh to Rs 6 lakh | 5% |
| Rs 6 lakh to Rs 9 lakh | 10% |
| Rs 9 to Rs 12 lakh | 15% |
| Rs 12 to Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
How much income is tax free?
The tax exemption limit for those who have chosen the new tax regime is Rs.3 lakh.
FM on TDS
2% TDS is being removed from mutual funds. TCS credit is proposed to be given in salary, following the standard operating method for TDS.
Who Needs to Pay Income Tax?
The following are the primary types of persons and companies who are required to pay tax if their net taxable income for FY 2024-25 exceeds the stipulated limit:
- Salaried individuals
- Self-employed individuals
- Self-employed professionals.
- Hindu Undivided Families (HUF)
- Legally recognized artificial persons
- The Body of Individuals (BOI)
- Association of Persons (AOP)
- Businesses and corporate firms
- Local Authorities