Earn more than Rs 10 lakh annual income? You will save Rs 17,500 in taxes due to income tax changes in Budget 2024
Budget 2024 announcements include changes to the tax slabs in the new tax regime to make it more attractive to taxpayers. Additionally, a proposal is to raise the standard deduction to Rs 75,000 from Rs 50,000 under this new regime. According to Finance Minister Nirmala Sitharaman, these adjustments will enable salaried employees under the new tax regime to save up to Rs 17,500 in income tax.#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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According to a Times of India news report, the financial implications of this Budget will differ for each individual based on their specific income level, the particular income tax regime they select, and the nature and location of their investment portfolio.
Also read: Budget 2024: New income tax slabs, capital gains tax, key tax changes that impact salaried, other taxpayers
Here is a look at this in detail.
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More NewsFor anyone earning Rs 10 lakh or more annually, the changes made by the finance minister in tax slabs under the new regime and the increased standard deduction mean an annual net gain of Rs 17,500. As your tax reduces, the health and education cess also decreases, resulting in an additional saving of Rs 700 (4% of Rs 17,500), bringing the total savings to Rs 18,200.“If your annual income is between Rs 50 lakh and Rs 1crore, you will save Rs 1,750 (10% of 17,500) on surcharge taking your net savings, including on cess, to Rs 20,020. At incomes of between Rs 1 cr and Rs 2 cr, the 15% surcharge rate means your total savings including surcharge and cess add up to Rs 20,930. Between Rs 2 crore and Rs 5 crore excluding dividends and capital gains, the 25% surcharge means your total savings add up to Rs 22,750. At the same income level including dividends and capital gains, the surcharge is 15%, so you save Rs 20,930,” stated the ToI news report.If your annual income is below Rs 7.75 lakh, you may not have to pay any tax under the new rules. Here's how it works: You won't owe any tax for income up to Rs 3 lakh. For income between Rs 3 lakh and Rs 7 lakh, the tax rate is 5%, which means at Rs 7 lakh, your tax liability would be Rs 20,000. However, you will be eligible for a Rs 25,000 rebate under Sec 87A, so no tax would actually be due. Add the standard deduction of Rs 75,000, and you won't have to pay any tax until Rs 7.75 lakh.¦ If you have opted for the old I-T regime and intend to stay under it, none of these calculations matter, since nothing has changed under that regime.
"You could on the other hand lose out due to the changes in treatment of capital gains. Short-term gains on equities, for instance, will now be charged at 20% instead of 15%. So, if you gain, say, Rs 2 lakh from buying and selling equity within a year, the tax on the gain will now be Rs 40,000 and not Rs 30,000,” ToI stated.Selling a property held for over two years can lead to significant tax implications. Under the new system, gains from the sale will be taxed at 12.5% instead of 20%, but there will no longer be an adjustment for inflation. For example, if you bought a house for Rs 1 crore five years ago and sold it for Rs 1.2 crore, previously the purchase price would have been adjusted for inflation over the five years, potentially resulting in no capital gains tax. However, under the new system, the entire Rs 20 lakh gain would be subject to a 12.5% tax, resulting in a tax liability of Rs 2.5 lakh.#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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This story originally appeared on: India Times - Author:Faqs of Insurances
