Major changes in Indian Union Budget 2024
The Indian Union Budget for 2024 introduced several significant tax changes aimed at simplifying and enhancing benefits within the new tax regime. Here are the main highlights:
Increased Standard Deduction: The standard deduction in the new regime has been increased from Rs 50,000 to Rs 75,000, allowing salaried taxpayers to save more on taxable income. This change benefits employees across all income levels, with additional savings of up to Rs 17,500 annually for those in the highest tax bracket
.Revised Tax Slabs: The government has adjusted tax rates and expanded income brackets, maintaining a 5% tax rate for income between Rs 3-7 lakh, 10% for Rs 7-10 lakh, 15% for Rs 10-12 lakh, 20% for Rs 12-15 lakh, and 30% for income above Rs 15 lakh. These changes aim to reduce tax burdens incrementally across income ranges
.Increased Family Pension Deduction: The deduction limit on family pensions has been raised from Rs 15,000 to Rs 25,000, benefiting pensioners by reducing taxable income in the new regime
.Simplification Intent: Although there are no immediate changes to the old tax regime, the government has emphasized a focus on simplifying the tax framework through the new tax regime, which removes most exemptions but offers lower rates, making it increasingly attractive for individual taxpayers.
Aspect | Old Regime | New Regime (2024) |
---|---|---|
Standard Deduction | Rs 50,000 | Rs 75,000 |
Income Tax Slabs | Progressive slabs with tax rates based on income, with deductions allowed | Revised slabs with lower rates, fewer deductions and exemptions |
Income Exemption | Basic exemption up to Rs 2.5 lakh for those below 60, Rs 3 lakh for senior citizens, Rs 5 lakh for super-senior citizens | Income up to Rs 3 lakh exempt from tax |
Tax Rates | Ranges from 5% to 30% across various income brackets | Revised rates, with 5% for Rs 3-7 lakh, 10% for Rs 7-10 lakh, etc. |
Family Pension Deduction | Rs 15,000 | Increased to Rs 25,000 |
Deductions | Allows several deductions (80C, 80D, 80CCD(1b), etc.) for investments, insurance, and pensions | Limited deductions; focus on simplified, lower tax rates |
Rebate for Income up to Rs 7.75 lakh | Not applicable; only exemptions and deductions available | Income up to Rs 7.75 lakh is effectively tax-free after standard deduction adjustments |
The 2024 tax adjustments primarily incentivize the adoption of the new tax regime, offering a streamlined structure with fewer deductions, higher standard deductions, and simplified rates.
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