New tax regime changes in Budget 2024: New tax slabs, standard deduction limit hike, other key announcements Know all the changes announced in the new tax regime from income tax slabs to standard deduction limit in Budget 2024
The finance minister Nirmala Sitharaman has announced changes in the income tax slabs in the new tax regime for the current financial year 2024-25 in her budget speech. This is the first budget of Modi government in the third term.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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The changes proposed in the new tax regime are as follows:
1. Income tax slabs relaxed from incomes up to Rs 10 lakh
2. Standard deduction limit for salaried and pensioners hiked to Rs 75,000 from Rs 50,000
3. Standard deduction limit for family pensioners hiked to Rs 25,000 from Rs 15,000
4. Deduction on employer's NPS contribution for private sector employees hiked to 14% from 10%.
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Proposed income tax slabs in new tax regime from April 1, 2024
Income tax slabs (In Rs)
Income tax rate (%)
Up to 3,00,000
0
3,00,001 – 7,00,000
5%
7,00,001 – 10,00,000
10%
10,00,001-12,00,000
15%
12,00,001-15,00,000
20%
15,00,001 and above
30%
Current income tax laws require an individual, not having any business income, to choose between the new and old tax regime every financial year. Remember the new tax regime has become the default tax regime from April 1, 2023. Hence, an individual is specifically required to choose old tax regime to claim common deductions such as Section 80C, Section 80D, and tax exemptions on house rent allowance (HRA).
Current income tax slabs under new tax regime
Here are the income tax slabs for FY 2024-25 (AY 2025-26) in the new tax regime prior to the Budget 2024 announcements:Income tax slabs (In Rs)
Income tax rate (%)
Up to 3,00,000
0
3,00,001 – 6,00,000
5%
6,00,001 – 9,00,000
10%
9,00,001-12,00,000
15%
12,00,001-15,00,000
20%
15,00,001 and above
30%
Cess will be levied at 4% on income tax amount. Surcharges will be levied on incomes exceeding Rs 50 lakh.
Deductions under new tax regime
Currently, the new tax regime offers following tax benefits to the taxpayers:a) Five income tax slabs
b) Basic exemption limit of Rs 3 lakh for all individuals irrespective of their age
c) Zero tax payable for taxable incomes not exceeding Rs 7 lakh. This is due to tax rebate of up to Rs 25,000 available under Section 87A
d) Standard deduction of Rs 50,000 for salaried individuals and pensioners. Family pensioners also get benefit of standard deduction of Rs 15,000.
e) Surcharge on incomes above Rs 5 crore reduced to 25% from 37%
f) Marginal tax relief for small taxpayers whose incomes exceed Rs 7 lakh
Income tax slabs under the old tax regime
There have been no changes made in the income tax slabs and rates under the old tax regime in the full Budget 2024, presented today. The income tax slabs applicable to an individual depend on the person's age in a particular financial year.In the old tax regime, the basic exemption limit for individuals below 60 years is Rs 2.5 lakh. For senior citizens (above 60 years but below 80 years) and super senior citizens (80 years of age and above), the basic tax exemption limit is Rs 3 lakh and Rs 5 lakh, respectively.
Here are the income tax slabs for FY 2024-25 (AY 2025-26) in the old tax regime for individuals below 60 years of age, senior citizens and super senior citizens.
Current income tax slabs for individuals below 60 years
Income tax slabs (In Rs)
Income tax rate (%)
Up to 2,50,000
0
2,50,001 – 5,00,000
5%
5,00,001 – 10,00,000
20%
10,00,001 and above
30%
Current income tax slabs for senior citizens
Income tax slabs (In Rs)
Income tax rate (%)
Up to 3,00,000
0
3,00,001 – 5,00,000
5%
5,00,001 – 10,00,000
20%
10,00,001 and above
30%
Current income tax slabs for super senior citizens
Income tax slabs (In Rs)
Income tax rate (%)
Up to 5,00,000
0
5,00,001 – 10,00,000
20%
10,00,001 and above
30%
Cess will be levied at 4% on the income tax amount. Surcharges will be levied on incomes exceeding Rs 50 lakh.
Deductions under old tax regime
The old tax regime offers various tax exemptions and deductions. A taxpayer can avail a deduction of up to Rs 1.5 lakh under Section 80C, up to Rs 25,000/Rs 50,000 under Section 80D, up to Rs 10,000 under Section 80TTA and up to Rs 50,000 under Section 80CCD (1B), among others.Further, an individual can claim tax exemptions on HRA, Leave Travel Allowance (LTA).
Unlike the new tax regime, zero tax payable is only for taxable incomes not exceeding Rs 5 lakh. In old tax regime, tax rebate of up to Rs 12,500 under Section 87A is available.
Surcharges under old, new tax regime
Surcharge is levied on the total amount of income tax payable if the taxable income of a taxpayer exceeds specified limits. Surcharge is levied if the taxable income exceeds Rs 50 lakh under both the tax regime. However, there are different surcharge rates for different ranges of taxable income.Surcharge under new tax regime
Range of IncomeSurcharge rate
Up to Rs 50 lakh
Nil
Rs 50,00,001 to Rs 1 crore
10%
Rs 1,00,00,001 to Rs 2 crore
15%
Above Rs 2,00,00,000
25%
Surcharge under old tax regime
Range of IncomeSurcharge rate
Up to Rs 50 lakh
Nil
Rs 50,00,001 to Rs 1 crore
10%
Rs 1,00,00,001 to Rs 2 crore
15%
Rs 2,00,00,001 to Rs 5 crore
25%
Above Rs 5,00,00,000
37%
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This story originally appeared on: India Times - Author:Faqs of Insurances
