New tax slabs announced in Union Budget 2024
In her budget speech, Finance Minister Nirmala Sitharaman announced updates to the new tax regime. The tax slabs are now: ₹0-₹3 lakh: Nil ₹3-₹7 lakh: 5% ₹7-₹10 lakh: 10% ₹10-₹12 lakh: 15% ₹12-₹15 lakh: 20% Above ₹15 lakh: 30% According to the FM, salaried employees could save ₹17,500 under the new tax regime.
Increase in standard deductions
During her speech in the Lok Sabha, Sitharaman also announced a ₹25,000 increase in the standard deduction for salaried employees under the new tax regime, raising it to ₹75,000. The deduction for family pensions will also rise from ₹15,000 to ₹25,000. These changes are expected to benefit around 4 crore salaried and pensioner individuals, the FM said.
FM proposes review of I-T Act, 1961
Additionally, the FM proposed a review of the Income Tax Act, 1961 within six months to reduce litigation. "I propose to review the Income Tax Act...to reduce litigation, in six months. A beginning is being made in the Finance Bill by easing the tax regime for charities. Two tax exemption regimes for charities are proposed to be merged into one," she said.
Capital gains taxation to be simplified
Sitharaman announced that capital gains taxation will be simplified. Short-term gains on certain financial assets will be taxed at 20%. To benefit lower and middle-income groups, the exemption limit for some financial instruments will rise to ₹1.25 lakh annually. Unlisted bonds, debentures, debt mutual funds, and market-linked debentures will be taxed on gains regardless of holding period, she said.
