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Relief for salaried class under new tax regime; 50% hike in standard deduction to ₹75,000

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2 min read | Updated on July 23, 2024, 13:42 IST

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SUMMARY

In the last fiscal, more than two-thirds of individual taxpayers have availed of the new personal income tax regime. Over 8.61 crore IT returns were filed in the 2023-24 fiscal.

Income of up to ₹3 lakh will continue to be exempted from income tax under the new regime

Income of up to ₹3 lakh will continue to be exempted from income tax under the new regime

In sops for the middle class, Finance Minister Nirmala Sitharaman on Tuesday hiked the standard deduction by 50% to ₹75,000 and tweaked tax slabs under the new income tax regime to provide more money in the hands of the salaried class to boost consumption.

She said salaried employees in the new tax regime could save up to ₹17,500 in income tax annually following the changes announced in the Budget.

The standard deduction for salaried employees is proposed to be increased from ₹50,000 to ₹75,000 annually. Similarly, the deduction on family pension for pensioners is proposed to be enhanced from ₹15,000 to ₹25,000.

"This will provide relief to about four crore salaried individuals and pensioners," Sitharaman said in her Budget speech.

In the last fiscal, more than two-thirds of individual taxpayers have availed of the new personal income tax regime. Over 8.61 crore IT returns were filed in the 2023-24 fiscal.

The new tax slabs under the new income tax regime will be effective from April 1, 2024. (Assessment Year 2025-26).

Sitharaman said income of up to ₹3 lakh will continue to be exempted from income tax under the new regime.

As per the proposal, a 5% tax will be levied on income between ₹3-7 lakh, 10% between ₹7-10 lakh, 15% for ₹10-12 lakh.

However, 20% tax will continue to be levied on income between ₹12-15 lakh and 30% for income above ₹15 lakh.

Under the existing new I-T regime, a 5% tax is levied on income between ₹3-6 lakh, 10% for income between ₹6-9 lakh.

Income between ₹9-12 lakh and ₹12-15 lakh is subject to 15% and 20% tax, respectively. A 30% I-T would be applicable on income above ₹15 lakh.

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