On Tuesday, Finance Minister Nirmala Sitharaman unveiled a new economic roadmap of Modi 3.0 in the Lok Sabha. Presenting the Union Budget 2024, Sitharaman said that the Modi government will focus more on the middle class and youth of the country.
The recent changes in India’s tax regime, announced by Finance Minister Nirmala Sitharaman during the Union Budget 2024, will significantly benefit salaried employees.
The standard deduction has been increased from Rs 50,000 to Rs 75,000, resulting in an annual tax saving of Rs 17,500 for individuals opting for the new tax regime. This adjustment is aimed at providing relief to middle-class taxpayers.
Furthermore, the Finance Minister adjusted some of the tax slabs. Listed below are updated tax slabs:
Revised Slabs under new tax regime
| OLD SLABS | NEW SLABS | ||
| Upto Rs. 3 lakh | Nil | Upto Rs. 3 lakh | Nil |
| Rs. 3 lakh to Rs. 6 lakh | 5% | Rs. 3 lakh to Rs. 7 lakh | 5% |
| Rs. 6 lakh to Rs. 9 lakh | 10% | Rs. 7 lakh to Rs. 10 lakh | 10% |
| Rs. 9 lakh to Rs. 12 lakh | 15% | Rs. 10 lakh to Rs. 12 lakh | 15% |
| Rs. 12 lakh to Rs. 15 lakh | 20% | Rs. 12 lakh to Rs. 15 lakh | 20% |
| More than Rs. 15 lakh | 30% | More than Rs. 15 lakh | 30% |
Under the new tax regime, the lowest income slab has been raised to Rs. 3 lakhs from Rs. 2.5 lakhs and will be taxed at 0 percent. Income between Rs. 3 lakhs and Rs. 7 lakhs will incur a 5 percent tax, while earnings from Rs. 7 lakhs to Rs. 10 lakhs will be taxed at 10 percent.
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The tax rate increases to 15 percent for income between Rs. 10 lahks and Rs. 12 lakhs, 20 percent for Rs. 12 lakhs to Rs. 15 lakhs, and 30 percent for income exceeding Rs. 15 lakhs.
Previously, under the new income tax regime, there was no tax up to Rs 3 lakh income, Rs 6 lakh to Rs 9 lakh was taxed at 10 percent, Rs 9 lakh to Rs 12 lakh was taxed at 15 percent, 12 lakhs to Rs 15 lakh at 20 percent and Rs 15 lakh and above at 30 percent.
Furthermore, the finance minister said that the National Pension System (NPS) deduction on employer’s contribution to employees’ basic salary has been raised from 10 per cent to 14 per cent. This will apply to public sector companies, and the private sector under the new regime.
Written By Vaibhav Patil
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