Illustration showing a stamper with words 'Income Tax'. For representational purposes.
Credits: iStock Photo
Finance Minister Nirmala Sitharaman on Tuesday, while presenting the Union Budget 2024, revised income tax slabs under the New Tax Regime, in a bid to provide relief to salaried individuals and tax payers.
Apart from revising the tax slabs, the FM also announced that the standard deduction limit for salaried individuals under the New Tax Regime would be increased to Rs 75,000 from the current Rs 50,000.
Here are the revised tax slabs under the New Regime:
After decades of having a singular income tax regime, FM Sitharaman introduced a parallel regime—the New Tax Regime—in the Union Budget 2020-21 in a bid to simplify and streamline taxation rules and expand the taxpayer base.
India has always had a notoriously low taxpayer base in comparison to the country's population: for instance, in 2021-22, a mere 2.09 crore people paid income taxes, about 2.2 per cent of the voting population. For comparison, the US and most European countries have over 50 per cent of their populations paying taxes.
Given this reality, it was thought that a simplfied tax regime with flat rates would be more appealing to the younger generation, backed by the notion that millennials exhibit a proclivity towards spending rather than saving.
Hence, tax slabs were revised, and lower tax rates were announced for the revised slabs in comparison to the Old Tax Regime. However, these lower rates under the New Regime came at a cost: specific deductions and exemptions that were allowed under the Old Regime were done away with.
As it stands, however, both the Old Regime and New Regime exist parallelly, and individuals can opt to get taxed under either.
Here are the tax slabs under the Old Regime:
Here is how the Old Regime compares to the New Regime after the revisions announced by the FM:
Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.