The Union Finance Minister Nirmala Sitharaman has presented the Union Budget for the Financial Year 2024-25, outlining the fiscal roadmap and allocations for the ongoing financial year.
This is the first full budget from the Modi 3.0 Government and the Seventh Consecutive budget by the finance minister.
In a significant move aimed at reworking the tax burden on the salaried class, Finance Minister Nirmala Sitharaman announced changes to the existing new income tax regime in the Union Budget for the Assessment Year 2024-25. The revised income tax slabs are as follows:
0 to 3 Lakhs: Nil
3 Lakhs to 7 Lakhs: 5%
7 Lakhs to 10 Lakhs: 10%
10 Lakhs to 12 Lakhs: 15%
12 Lakhs to 15 Lakhs: 20%
Above 15 Lakhs: 30%
Key Announcements
The government has raised the Standard Deduction limit from Rs 50,000 to Rs 75,000. This adjustment is expected to provide significant relief to the salaried class, who will now save an additional Rs 17,500 under the revised tax regime.
Finance Minister Sitharaman has proposed an increase in the long-term capital gains (LTCG) tax from 10% to 12.5%. This change aims to streamline capital gains taxation and is expected to affect high-income earners and investors.
A comprehensive review of the Income Tax Act was also announced, with a focus on easing taxation norms for both individuals and entities. The proposed changes are anticipated to simplify the tax filing process and reduce compliance burdens.
Detailed Breakdown of Revised Tax Slabs
Under the revised regime, individuals earning between Rs 12 lakh to Rs 15 lakh will now be taxed at a rate of 20%, a revision from previous rates. The hike in standard deduction is a welcome move, providing more disposable income for taxpayers and likely stimulating consumer spending.
The increase in LTCG tax to 12.5% is a notable change, expected to impact investment decisions. Tax experts suggest that while this might slightly reduce the attractiveness of long-term investments, it aligns the capital gains tax rate closer to other global standards.
The changes introduced in the Union Budget 2024-25 are designed to provide relief to the middle-income group while ensuring that high-income earners contribute a fair share. The increase in the standard deduction is particularly beneficial for the salaried class, ensuring they have a slightly more money in hand post-tax.
With the comprehensive review of the Income Tax Act, the government aims to make the tax system more taxpayer-friendly, potentially leading to higher compliance and a broader tax base.
These measures are expected to boost disposable incomes, encourage investment, and foster economic growth. Taxpayers are advised to review these changes and adjust their financial planning accordingly.
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