Budget 2024: Finance Minister Nirmala Sitharaman on Tuesday presented her seventh straight Budget for the fiscal 2024-25. Informing that the fiscal deficit is estimated at 4.9 per cent of GDP, Sitharaman said that the people have reposed their faith in the government led by PM Modi and re-elected it for the historic third term.
In a significant move, Sitharaman unveiled new income tax slabs under the revised tax regime. The Standard Deduction limit has been increased from Rs 50,000 to Rs 75,000, despite widespread expectations that it would be increased to Rs 1 lakh. Similarly, the deduction on family pension for pensioners was enhanced from Rs 15,000 to Rs 25,000. The old tax regime slabs remain unchanged.
Here are the new and old income tax slabs
New income tax slabs
- 0-3 lakh: Nil
- 3-7 lakh: 5%
- 7-10 lakh: 10%
- 1-12 lakh 15%
- 12-15 lakh 20%
- Above 15 lakh: 30%
Old income tax slabs
- 0-3 lakh: Nil
- 3-6 lakh: 5%
- 6-9 lakh: 10%
- 9-12 lakh: 15%
- 12-15 lakh: 20%
- Above 15 lakh: 30%
What does this mean for taxpayers?
By increasing the Standard Deduction by Rs 25,000, the government has given relief to salaried employees, who can save up to Rs 17,500 in income tax, and pensioners. The focus of the Union Budget 2024 is on the new tax regime, which means that the government is moving away from the old regime. The Finance Minister has also announced a comprehensive review of the Income Tax Act, 1961, in this regard.
Taxpayers in the highest tax bracket will save Rs 7,500 on account of enhancement in the standard deduction limit under the new regime and a further Rs 10,000 on the basis of rate rationalisation. The government has been trying to make a simple and exception-free tax regime for salaried taxpayers for the last few years.
"We have taken a number of measures in the last few years including the introduction of simplified tax regimes without exemptions and deductions for corporate tax and personal income tax. This has been appreciated by tax payers. 58% of corporate tax came from the simplified tax regime in the financial year 2022-23. Similarly, as per data available till now for the last fiscal, more than two-thirds have availed of the new personal income tax regime," said Sitharaman in her budget speech.
Additional measures
Meanwhile, the Finance Minister announced that short-term gains on certain financial assets would attract a tax rate of 20%, while long-term gains on all financial and non-financial assets would get a 12.5% tax rate. To attract further capital for India's developmental needs, Sitharaman also reduced corporate tax on foreign companies from 40 to 35%.
Sitharaman also announced Vivad se Vishwas scheme 2024 aimed at resolving tax disputes. It also announced measures for most taxpayer services to be digitised and made paperless, while simplifying the tax exemption regimes for charities and decriminalising delays for payment of TDS.
Talking about India's economic growth, Sitharaman said that it continues to shine. "Significant investments have been made to build robust infrastructure. Over 11 lakh crore rupees for capital expenditure have been allocated for infrastructure development. This would be 3.4 per cent of our GDP. Private investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies."
In a major boost for consumers, the government reduced customs duties on gold and silver to 6 per cent and on platinum to 6.4 per cent. The custom duties of medicines for cancer patients, X-ray medicines, mobile phones and mobile phone chargers have also been reduced. The government has also included solar cells and panels in the exempted list for customs duties. Leather and textile garments, footwear and other leather articles would also become cheaper. However, plastic products and telecom equipment will become more expensive.
"This budget will take the village, poor and farmers towards prosperity. 25 crore people have risen above poverty in the last 10 years. The Budget will give unlimited new opportunities to the youth. Education and skill will get new scale. This Budget will give new strength to the middle class. It has come with schemes to empower Dalit and backward class," said Prime Minister Narendra Modi in his speech after the Union Budget.
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