Budget 2024: Major Tax Revisions And Enhanced Deductions Benefit Salaried Individuals

NEW DELHI: Finance Minister Nirmala Sitharaman has made notable enhancements to the new income tax regime in the Union Budget 2024. The standard deduction has been increased from Rs 50,000 to Rs 75,000, resulting in an additional Rs 25,000 in deductions. This change will save salaried individuals up to Rs 17,500 annually under the new regime.

Standard Deduction Increase: Raised from Rs 50,000 to Rs 75,000, offering an additional Rs 25,000 in deductions.

Savings for Salaried Individuals: The new standard deduction will save taxpayers up to Rs 17,500 annually.

The updated tax slabs are as follows: income up to Rs 3 lakh is taxed at 0%, income from Rs 3 lakh to Rs 7 lakh is taxed at 5%, income from Rs 7 lakh to Rs 10 lakh is taxed at 10%, income from Rs 10 lakh to Rs 12 lakh is taxed at 15%, income from Rs 12 lakh to Rs 15 lakh is taxed at 20%, and income above Rs 15 lakh is taxed at 30%.

Updated Tax Slabs:

• Income up to Rs 3 lakh: Taxed at 0%
• Rs 3 lakh to Rs 7 lakh: Taxed at 5%
• Rs 7 lakh to Rs 10 lakh: Taxed at 10%
• Rs 10 lakh to Rs 12 lakh: Taxed at 15%
• Rs 12 lakh to Rs 15 lakh: Taxed at 20%
• Income above Rs 15 lakh: Taxed at 30%

Significant adjustments have been made to the tax slabs. The previous slab of Rs 3 lakh to Rs 6 lakh at 5% has been expanded to Rs 3 lakh to Rs 7 lakh. The 10% slab of Rs 6 lakh to Rs 9 lakh has been revised to Rs 7 lakh to Rs 10 lakh. The 15% slab previously covering Rs 9 lakh to Rs 12 lakh now applies to Rs 10 lakh to Rs 12 lakh.

• Updated Tax Slabs:
• Income up to Rs 3 lakh: Taxed at 0%
  Rs 3 lakh to Rs 7 lakh: Taxed at 5%
  Rs 7 lakh to Rs 10 lakh: Taxed at 10%
  Rs 10 lakh to Rs 12 lakh: Taxed at 15%
  Rs 12 lakh to Rs 15 lakh: Taxed at 20%
  Income above Rs 15 lakh: Taxed at 30%

Slab Adjustments:

• Rs 3 lakh to Rs 7 lakh: New slab at 5% (previously Rs 3 lakh to Rs 6 lakh)
• Rs 7 lakh to Rs 10 lakh: New slab at 10% (previously Rs 6 lakh to Rs 9 lakh)
• Rs 10 lakh to Rs 12 lakh: New slab at 15% (previously Rs 9 lakh to Rs 12 lakh)

These changes are expected to provide substantial relief to middle-class taxpayers.

Additionally, the government has increased the deduction limit for employers’ contributions to the National Pension System (NPS) from 10% to 14%, further benefiting employees.