Image Source : PTI New Delhi: Union Finance Minister Nirmala Sitharaman addresses a post-Budget press conference, in New Delhi.
Finance Minister Nirmala Sitharaman presented the first Budget of the Modi 3.0 government, introducing significant changes to the income tax structure. Notably, she revised tax slabs and increased the standard deduction limit under the New Tax Regime. However, the Old Tax Regime remains unchanged. After presenting the 2024 Union Budget in Parliament, she said, “Can’t take a call on whether the old tax regime will be done away with. Can only say the intention is to make the tax regime simpler. Can’t say if there will be a sunset on the old regime.”
Key announcements
No immediate change to old tax regime
After the Budget presentation, FM Sitharaman clarified that no decision has been made regarding the scrapping of the Old Tax Regime. “Can’t take a call on whether the old tax regime will be done away with; can only say the intention is to make the tax regime simpler,” she said.
Enhancements in new tax regime
To benefit the middle class, the standard deduction under the New Tax Regime has been raised from Rs 50,000 to Rs 75,000. Minor adjustments to tax slabs were also introduced, potentially offering an annual tax benefit of up to Rs 17,500 for individual taxpayers.
Old tax regime remains unchanged
Despite changes to the New Tax Regime, the Old Tax Regime has been left intact in the 2024–25 Union Budget. This move is seen as an incentive for more salaried individuals to adopt the New Tax Regime, which the government has been promoting as a straightforward and exemption-free alternative.
Old regime tax rates
0% for income up to Rs 5 lakh
15% for income between Rs 5 lakh and Rs 7.5 lakh
20% for income between Rs 7.5 lakh and Rs 10 lakh
30% for income above Rs 10 lakh
New regime tax rates (effective April 1, 2024
0% for income up to Rs 3 lakh
5% for income between Rs 3 lakh and Rs 7 lakh
10% for income between Rs 7 lakh and Rs 10 lakh
15% for income between Rs 10 lakh and Rs 12 lakh
20% for income between Rs 12 lakh and Rs 15 lakh
30% for income above Rs 15 lakh
Tax savings under new regime
Under the revised New Tax Regime, an individual earning up to Rs 10 lakh can save Rs 10,000 in taxes, paying Rs 47,500 compared to Rs 57,500 under the previous structure.
These new tax slabs will come into effect from April 1, 2024, following Parliament’s approval and Presidential assent.
Also read | Union Budget 2024: ‘Simplified taxation, revenue mobilisation in focus,’ says Nirmala Sitharaman
