On Tuesday (23rd July), Finance Minister Nirmala Sitharaman presented the Annual Financial Statement (Budget 2024-25) before the Lok Sabha. The Finance Minister has given relief to taxpayers who choose to opt for the New Tax regime as the tax slabs have been revised and the Standard deduction limit has been increased from Rs 50,000 to Rs 75,000.
Personal Income Tax: The Union Finance Minister made 2 announcements for those who adopt the new Tax regime.
- As per the Budgetary announcement, the Standard Deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000. Deduction on family pension, for pensioners, is proposed to be enhanced from Rs 15,000 to Rs 25,000. This will provide relief to 4 crore salaried individuals and pensioners. In the New Tax regime: The revised tax structure is –
Rs 0-3 lakh – nil
Rs 3 – 7 lakh – 5%
Rs 7-10 lakh- 10%
Rs10-12 lakh – 15%
Rs 12-15 lakh – 20%
Above Rs 15 lakh – 30%
Under the Nex Tax regime, a salaried employee is expected to save up to Rs 17,500 in Income tax.
#WATCH | On personal income tax rates in new tax regime, FM Sitharaman says, "Under new tax regime, tax rate structure to be revised as follows – Rs 0-Rs 3 lakh -Nil; Rs 3-7 lakh -5% ; Rs 7-10 lakh-10% ; Rs 10-12 lakh-15%; 12-15 lakh- 20% and above Rs 15 lakh-30%." pic.twitter.com/zQd7A4OsnT
— ANI (@ANI) July 23, 2024
Revenue of Rs 37,000 crores – Rs 29,000 crores in direct taxes and Rs 8,000 crores in indirect taxes will be foregone. While revenue of Rs 30,000 crore will be additionally mobilized, thus the total revenue foregone is about Rs 7,000 crores annually.
Additionally, the Union Finance Minister also announced that the government will undertake a comprehensive review of the Income Tax Act to make it easy to read.
During her 7th Budget speech, Finance Minister Nirmala Sitharaman also said the government will come out with SoP (standard operating procedure) for TDS defaults and simplify and rationalise the compounding of such offenses.
FM Sitharaman added that two tax exemption regimes for charitable trusts will be merged into one.
As per the Budgetary announcement, in the Financial Year 2023, around 58% of corporate tax has come from a simplified tax regime.
She informed the Lok Sabha that more than two-thirds of individuals availed of the new income tax regime.
Furthermore, the FM announced that DPI (Digital Public infrastructure) apps will be developed for credit, e-commerce, education, health, law, MSME service delivery, and urban governance.
