New Delhi, July 23: Finance Minister Nirmala Sitharaman announced significant changes to the new income tax regime during her Union Budget 2024 speech. These updates include revised income tax slabs for FY 2024-25 and an increase in the standard deduction.
The standard deduction has been raised from Rs 50,000 to Rs 75,000. Additionally, the tax slab limit for the 5% tax rate has been adjusted from Rs 5 lakh to Rs 7 lakh. The capital gains tax regime has undergone a complete overhaul, resulting in increased tax rates.
No modifications were made to the old income tax regime, as the government aims to promote the new regime.
One widespread expectation from Budget 2024 was the introduction of a 30% income tax rate for income and salary levels above Rs 20 lakh, instead of the current Rs 15 lakh threshold, to provide more disposable income for the middle class. Last year, the basic exemption limit under the new tax regime was increased to Rs 3 lakh, with the rebate limit set at Rs 7 lakh.
Anticipated changes included updates to Section 80C, Section 80D, and Section 80TTA, which pertain to savings and investments, medical insurance, and interest on bank deposits, respectively. Despite expectations, there were no additional benefits for senior citizens, such as a higher basic exemption limit under the new tax regime.