New Income Tax Slabs and Rates - FY 2023-24 and AY 2024-25 - Bizz Buzz

Income Tax Slabs 2024–25: Standard Deduction Under New Regime Increased; New Tax Slabs Announced

Budget 2024-25 Live Updates: Finance Minister Nirmala Sitharaman has introduced new income tax slabs and increased the standard deduction under the new income tax regime in the Union Budget 2024. This change aims to make the new regime more appealing to salaried taxpayers, the middle class, and the general populace. Experts anticipated these revisions to incentivize taxpayers to switch from the old regime to the new one.

Revised Income Tax Slabs for FY 2024–25:

1 Up to Rs 3 lakh: No tax

2 Rs 3 lakh to Rs 7 lakh: 5% tax

3 Rs 7 lakh to Rs 10 lakh: 10% tax

4 Rs 10 lakh to Rs 12 lakh: 15% tax

5 Rs 12 lakh to Rs 15 lakh: 20% tax

6 Above Rs 15 lakh: 30% tax

Key Expectations and Changes:

One significant expectation from Budget 2024 was the introduction of a 30% income tax rate for income levels above Rs 20 lakh, instead of the current Rs 15 lakh, to provide more financial relief to the middle class. Additionally, the standard deduction has been increased from Rs 50,000 to Rs 75,000 under the new regime.

Basic Exemption Limit and Rebate Adjustments:

Last year, the basic exemption limit under the new tax regime was raised to Rs 3 lakh. Personal income tax experts suggest this should be further increased to Rs 5 lakh. The rebate limit, currently at Rs 7 lakh, may also be revised to Rs 8 lakh to benefit more taxpayers.

Anticipated Changes in Sections 80C, 80D, 80TTA:

Adjustments to Section 80C (savings and investments), Section 80D (medical insurance), and Section 80TTA (interest on bank deposits) are anticipated. There is also consideration for higher basic exemption limits for senior citizens under the new tax regime.

Promoting the National Pension System (NPS):

To boost the National Pension System, tax benefits for employee contributions to NPS may also be enhanced in the new income tax regime.

Budget 2024 Highlights:

1 Revised income tax slabs for FY 2024–25 under the new regime.

2 Increased standard deduction from Rs 50,000 to Rs 75,000.

3 Expected adjustments to the basic exemption limit and rebate thresholds.

4 Potential changes in tax benefits for savings, investments, and senior citizens.

Stay tuned for further updates on income tax rates and other major announcements from the Budget 2024.