The union government in Budget 2024 proposed key changes in the income tax regime. Finance Minister Nirmala Sitharaman announced changes in income tax slabs for salaried individuals. The rates, however, remain the same.
The slab of ₹3 lakh to ₹6 lakh has been expanded to ₹3 lakh to ₹7 lakh. The rate of taxation, which is 5%, remains unchanged. Similarly, the other new slabs are ₹7 lakh to ₹10 lakh at 10%, Rs10 lakh to ₹12 lakh at 15%, ₹12lakh to ₹15lakh at 20%, and income above ₹15 lakh at 30%.
Here is how much you will have to pay if you earn ₹20 lakh. If your income is ₹20 lakh, you will have to pay ₹3 lakh in taxes, and thus will be left with ₹17 lakh according to Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited.
The standard deduction has been revised to ₹75,000 from ₹50,000. The standard deduction is a provision by which a fixed amount is deducted from the gross income of salaried individuals and pensioners before arriving at their taxable income.
FM also simplified the capital gains taxation by introducing a flat rate of 20 per cent on short-term capital gains while all other financial assets and non-financial assets will continue to attract the applicable tax rate.
“Long-term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. For the benefit of the lower and middle-income classes, I propose to increase the limit of exemption of capital gains on certain financial assets to ₹ 1.25 lakh per year,” she said.
Sitharaman proposed to review and simplify the Income Tax Act, 1961
During the Budget speech, Finance Minister Nirmala Sitharaman said, "I announce a comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months."
