In a significant move to benefit millions of salaried employees and pensioners, Finance Minister Nirmala Sitharaman announced key changes in the personal income tax structure as part of the 2024-25 Budget.
The revisions aim to provide substantial financial relief to approximately four crore individuals.
One of the major highlights is the increase in the standard deduction for salaried employees from Rs 50,000 to Rs 75,000.
This adjustment is likely to offer considerable tax savings and ease the financial burden on the working population.
Additionally, the government has raised the deduction on family pensions for pensioners from Rs 15,000 to Rs 25,000.
This enhancement is to provide better support to retired individuals and their families, aligning with the government’s objective to improve the financial well-being of senior citizens.
The revised tax rate structure under the new tax regime is as follows:
- Up to Rs 3 lakh: Nil
- Rs 3 lakh to Rs 7 lakh: 5%
- Rs 7 lakh to Rs 10 lakh: 10%
- Rs 10 lakh to Rs 12 lakh: 15%
- Rs 12 lakh to Rs 15 lakh: 20%
- Above Rs 15 lakh: 30%
These changes however are likely to result in significant tax savings for salaried employees, with potential savings of up to Rs 17,500 in income tax.
The Finance Minister however noted that the revised tax regime is designed to be more taxpayer-friendly and provide greater incentives for individuals to opt for it.
Meanwhile, Sitharaman highlighted that data from the last fiscal year indicates a growing preference for the new personal income tax regime, with more than two-thirds of taxpayers choosing to avail of its benefits.
This trend further reflects the regime’s appeal and effectiveness in offering tax relief and simplification.
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