Finance Minister Nirmala Sitharaman presented the first Budget of Modi 3.0 on Tuesday. The Union Budget 2024 marks the 7th consecutive budget by Nirmala Sitharaman as finance minister, the highest ever by an Indian finance minister. Nirmala Sitharaman has been at the forefront of criticism for being harsh on the middle class and salaried employees. The dissatisfaction among the middle class attributed to underwhelming performance by the Bharatiya Janata Party in the 2024 Lok Sabha poll. The 2024 Union Budget was expected to provide relief to the middle class in light of poor household consumption and discontent among salaried classes.
In Budget 2024, the Government provided relief to salaried and middle-class individuals under the new tax regime. However, there is no change in the old tax regime. The Finance Minister slightly tweaked the slab rates for the new tax regime, however, kept the highest slab at ₹15 lakh like before. Moreover, the standard deduction for the new tax regime was increased to ₹75,000 from ₹50,000 earlier.
Under the new income tax regime effective from April 1, 2024, the basic exemption limit remains at ₹3 lakh.
– Income from ₹3 lakh to ₹7 lakh: Taxed at 5%
– Income from ₹7 lakh to ₹10 lakh: Taxed at 10%
– Income from ₹10 lakh to ₹12 lakh: Taxed at 15%
– Income from ₹12 lakh to ₹15 lakh: Taxed at 20%
– Income above ₹15 lakh: Taxed at 30%
Salaried individuals and pensioners can claim a certain amount under standard deduction by default without any investment or spending of money by the taxpayers. The provision re-introduced during the Budget announcement in 2018.
The Budget 2023 allowed the claim of a standard deduction of ₹50,000 in the new regime as well. Thus, for FY 2023-24, you will be able to claim the standard deduction of ₹50,000 both under the new and old regime.
Budget 2024 increased the standard deduction limit for taxpayers opting for the new tax regime from ₹50,000 to ₹75,000. This increase is applicable from FY 2024-25.
-Income up to ₹2.5 lakh is exempt from taxation under the old tax regime
-Income between ₹2.5 lakh to ₹5 lakh is taxed at 5%
-Personal income from ₹5 lakh to ₹10 lakh is taxed at a rate of 20%.
-Income above ₹10 lakh is taxed at a rate of 30% under the old regime
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