Budget 2024: No tax for income up to Rs 3 lakh

By Dinalipi Bureau Last updated Jul 23, 2024 216

New Delhi: The Union government has introduced major changes to the new tax regime in Budget 2024-25. It has increased the Standard Deduction limit to Rs 75,000 from Rs 50,000 allowing the salaried people to save up to Rs 17,500 in taxes under the new regime.

While presenting the Budget on Tuesday, Finance Minister Nirmala Sitharaman made no changes to the old regime but tweaked the tax slabs for the new regime. There will be no income tax for people earning up to Rs 3 lakh under the new regime.

Revised Tax Slabs:

Up to Rs 3 lakh —– NIL
From Rs 3 lakh to Rs 7 lakh —– 5%
From Rs 7 lakh to Rs 10 lakh —– 10%
From Rs 10 lakh to Rs 12 lakh —– 15%
From Rs 12 lakh to Rs 15 lakh —– 20%
Above Rs 15 lakh —– 30%

The Finance Minister has proposed increase in tax deduction on National Pension Scheme (NPS) from 10% of salary to 14% of salary. This will cover both government employees and private company employees.

The Finance Minister has proposed a comprehensive review of the Income Tax Act with an aim to simplify taxation norms and provide further relief to taxpayers. The Finance Minister said the government would come out with SoP (standard operating procedure) for TDS defaults and simplify and rationalise compounding of such offences. Further, the old and new tax exemption regimes for charitable trusts will be merged into one.

In the proposed Budget, the Securities Transaction Tax on Futures contracts has been increased to 0.2%, and on Options contracts, it has been hiked to 0.1%. This will affect the cost of trading these financial instruments. What is the significance of the abolition of the angel tax in the new tax regime?

The Finance Minister has proposed abolition of the angel tax. This leads to the elimination of the tax on investments received above the fair market value of the shares.

The corporate tax rate for foreign companies has been reduced to 25%. This aims at making the Indian corporate tax landscape more attractive and conducive to foreign investors.