New Delhi: In a significant move aimed at providing relief to the middle class, Finance Minister Nirmala Sitharaman announced substantial changes to the tax regime while presenting the Budget 2024. The much-anticipated gift includes an increased limit for the standard deduction and simplified tax slabs in the new tax regime, although the old tax regime remains unchanged.
Increased Standard Deduction:
The government has raised the standard deduction limit in the new tax regime from Rs 50,000 to Rs 75,000. This change aims to ease the tax burden on salaried individuals and pensioners, offering a greater scope for tax savings.
Simplified Tax Slabs:
The new tax regime now features simplified tax slabs, making it more accessible and easier to understand for taxpayers. The revised tax slabs are as follows:
Income up to Rs 3 lakh: No tax (unchanged)
Income between Rs 3 lakh and Rs 7 lakh: 5% tax (previously Rs 3 lakh to Rs 6 lakh)
Income between Rs 7 lakh and Rs 10 lakh: 10% tax (previously Rs 6 lakh to Rs 9 lakh)
Income between Rs 10 lakh and Rs 12 lakh: 15% tax
Income between Rs 12 lakh and Rs 15 lakh: 20% tax
Income above Rs 15 lakh: 30% tax
With these changes, an individual with an income of Rs 7.75 lakh will now effectively pay no tax, offering significant relief to common taxpayers.
Additional Benefits for Pensioners:
In a further boon for pensioners, the government has increased the tax rebate on family pensions from Rs 15,000 to Rs 25,000. This measure is designed to provide additional financial support to pensioners, enhancing their disposable income.
While the modifications in the new tax regime are expected to benefit a large segment of the middle class, the decision to keep the old tax regime unchanged has been met with mixed reactions. Some experts believe that updating both regimes could have provided a more comprehensive relief package.
Nonetheless, the increased standard deduction and the streamlined tax slabs are poised to make a positive impact, simplifying the tax filing process and reducing the overall tax liability for many.
The 2024 Budget demonstrates the government’s commitment to easing the financial burden on the middle class and pensioners. By increasing the standard deduction limit and revising the tax slabs, Finance Minister Nirmala Sitharaman has provided the anticipated relief, fostering a more taxpayer-friendly environment.
The implementation of these changes will be closely watched, as taxpayers begin to navigate the updated tax landscape and evaluate the tangible benefits of the government’s latest fiscal measures.
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