Budget 2024: Centre Revises Income Tax Slabs, Standard Tax Deduction Raised To Rs 75,000

Announcing the revised income tax structure while presenting the Union Budget 2024, Finance Minister Nirmala Sitharaman said that the tax for a salary of up to Rs 3 lakhs is nil, between Rs 3-7 lakhs is 5 percent, between Rs 7-10 lakhs is 10 percent, between Rs 10-12 lakhs is 15 percent, between Rs 12-15 lakhs is 20 percent, and over Rs 15 lakhs is 30 percent.

The revised tax slabs aim to reduce the burden on groups earning lower incomes. The Centre proposed that the standard tax deduction be raised from Rs 50,000 to Rs 75,000. Similarly, deduction for family pension for pensioners has been proposed to be increased from Rs 15,000 to Rs 25,000.  Sitharaman said that the revised tax regime could potentially help tax payers save up to Rs 17,500 per year.

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A “comprehensive review” of the Income Tax Act, cutting litigation and making it easy to read, is expected to be completed within six months.

Notably, the centre has proposed to abolish the angel tax, first introduced in 2012, to boost start-ups.

The Goods and Services Tax (GST) has significantly reduced tax incidents for the common man and expressed relief for industry, marking a success of vast proportions, stated Sitharaman.

Social Securities Tax (STT) has been increased from 0.1 percent to 0.2 percent. STT for Future & Options proposed to be increased to 0.02 percent and 0.01 percent, respectively.

Additionally, Sitharaman said that the TDS rate on e-commerce operators will be reduced from 1 percent to 0.1 percent. “I propose to decriminalise delays in payments of TDS upto their filing due date. Simplification of reassessment and reopening of returns. From now, this can be done after three years only if the income involved is ₹50 lakh or more, with a time limit of six years,” said the finance minister.

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On long-term capital gains, the finance minister announced that long-term capital gains on all assets – financial and non-financial – will attract a tax rate of 12.5 percent. The limit of exemption for capital gains will be set at Rs 1.25 lakh per year.

Noting that the Indian mobile industry has matured in domestic manufacturing, Sitharaman proposed to reduce the Basic Customs Duty (BCD) on mobile phones and mobile PCDA (Printed Circuit Design Assembly) charges to 15 percent. She announced a proposal to increase the duty on printed circuit board assemblies (PCBA) for specific telecom equipment by 10 to 15 percent.