In a recent interview, Finance Minister Nirmala Sitharaman revealed that the Union Budget 2024 aims to provide relief to the middle class, albeit within certain limitations.
Nirmala Sitharaman stated, “I want to relieve the middle class, but I have limitations too. I want to give relief by reducing the tax rate, and that is why the standard deduction rate has been increased from ₹50,000 to ₹75,000. By increasing the tax rate, the tax liability of the high-income class also increases. The new tax regime was implemented with the aim of reducing the tax rate and has lower tax rates than the old tax regime,” as quoted by Times Now.
Expressing her empathy towards the middle class, she added, “I am also from the middle class...and understand their problems,” Times Now reported her saying.
In the interview, Nirmala Sitharaman highlighted that prior to the Goods and Services Tax (GST), different states imposed their own taxes on essential items, leading to price discrepancies across the country. The implementation of GST has now standardised the prices of essential goods nationwide, providing relief to common people.
The Budget 2024 proposes adjustments to the income tax slabs under the new tax regime, benefiting individuals with taxable incomes up to ₹10 lakh.
The proposed tax slabs are as follows:
₹0 - ₹3,00,000: 0%
₹3,00,001 - ₹7,00,000: 5%
₹7,00,001 - ₹10,00,000: 10%
₹10,00,001 - ₹12,00,000: 15%
₹12,00,001 - ₹15,00,000: 20%
₹15,00,001 and above: 30%.
On July 23, Finance Minister Nirmala Sitharaman presented her seventh consecutive budget and the first of the third NDA government led by Modi. In sops for the middle class, the finance minister hiked the standard deduction by 50 percent from ₹50,000 to ₹75,000 and tweaked tax slabs under the new income tax regime to provide more money for the salaried class.
The new tax slabs under the new income tax regime will be effective from April 1, 2024 (Assessment Year 2025-26).
Nirmala 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 percent tax will be levied on income between ₹3-7 lakh, 10 per cent between ₹7-10 lakh, 15 per cent for ₹10-12 lakh.
However, a 20 percent tax will be levied on income between ₹12-15 lakh and 30 percent on income above ₹15 lakh.
Under the existing new I-T regime, a 5 percent tax is levied on income between ₹3-6 lakh, 10 per cent for income between ₹6-9 lakh.
Income between ₹9-12 lakh and ₹12-15 lakh is subject to 15 percent and 20 percent tax, respectively. At least 30 percent I-T would be applicable on income above ₹15 lakh.
However, no changes were announced for the old income tax regime.
