Budget 2024: New Tax Regime Vs Old Tax Regime

Finance Minister Nirmala Sitharamn presented the Union Budget 2024 in the Parliament today. One of the biggest takeaways from the budget was the announcement of the new tax regime, which gave a big relief to the middle class.

In Budget 2024, the standard deduction rate has been raised from Rs 50,000 to Rs 75,000. Sitharaman stated that the increase of Rs 25,000 will save salaried individuals Rs 17,500 under the new tax regime.

The income tax slab structure has also received a revised avatar.

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Earlier, under the old tax regime, there was no tax up to Rs 2.5 lakh. Income above Rs 2.5 lakhs and below Rs 5 lakhs was taxed at 5 percent, while those in the bracket of Rs 5 lakhs and Rs 10 lakhs were taxed at 20 percent. Those above Rs 10 lakhs incurred a tax rate of 30 percent.

However, in the new tax regime announced today, there is no tax up to Rs 3 lakh. A 5 percent tax rate is levied on those earning between Rs 3 lakh and Rs 7 lakh, while those in the bracket of Rs 7 lakh to Rs 10 lakh have a tax rate of 10 percent.

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Those earning between Rs 10 lakh and Rs 12 lakh have a tax rate of 15 percent, while Rs 12 lakh and 15 lakh will have a tax rate of 20 percent. A 30 percent tax rate is applicable for those earning more than Rs 15 lakh.

Moreover, the deduction for family pensions is proposed to be hiked from Rs 15,000 to Rs 25,000, benefitting over 4 crore salaried individuals and pensioners.