The union government in Budget 2024 has proposed key changes in the income tax regime. Finance Nirmala Sitharaman has announced changes in income tax slabs for the salaried individuals. The rates, however remain the same.
The slab of ₹3 lakh to ₹6 lakh has been expanded to ₹3 lakh to ₹7 lakh . The rate of taxation, that is 5%, remains unchanged. Similarly, the other new slabs are ₹7lakh to ₹10lakh at 10%, Rs10 lakh to ₹12lakh at 15%, ₹12lakh to ₹15lakh at 20% and income above ₹15lakh at 30%.
Here is how much you will have to pay if you earn ₹20lakh. If your income is ₹20lakhs, you will have to pay ₹3 lakh in taxes and thus will be left with ₹17 lakh according to Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited.
The standard deduction has been revised to ₹75,000 to ₹50,000. Standard deduction is a provision for salaried taxpayers who are eligible to receive pension.
FM also simplified the capital gains taxation by introducing a flat rate of 20 percent on short term capital gain while on all other financial assets and non-financial assets continuing to attract the applicable tax rate.
“Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. For the benefit of the lower and middle-income classes, I propose to increase the limit of exemption of capital gains on certain financial assets to ₹ 1.25 lakh per year,” she said.
Sitharaman proposed to review and simplify the Income Tax Act, 1961
During the Budget speech, Finance Minister Nirmala Sitharaman said, “I announce a comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months.”
