While presenting the Union Budget, the Union Finance Minister Nirmala Sitharaman announced the significant reforms in the income tax for the financial year 2024-25, which aimed at simplifying tax laws, promoting compliance and fostering economic growth. The finance minister emphasized how the streamlined business tax system has been widely adopted and is currently expected to generate 58% of corporate tax revenue in 2022–2023.Through an increase in personal income tax rate slabs, the FM has provided some relief to taxpayers. As in the previous year, the new tax slab will have no tax up to an income of Rs 3 lakh.Tax Relief and Revised Tax Slabs in New Tax Regime 👇🔸 Income tax saving of up to ₹ 17,500/- for salaried employee in new tax regime🔸 #IncomeTax Relief for around Four Crore Salaried Individuals and Pensioners🔸 Standard deduction for salaried employees to be increased… pic.twitter.com/2m7pPRmzgP— PIB India (@PIB_India) July 23, 2024According to the new reforms, now income between Rs 3-7 lakh will attract a tax rate of 5 per cent, which was 5 per cent tax earlier also but was applied on income of between Rs 3-6 lakhs.For income of between Rs 7-10 lakh will now be taxed at 10 per cent, which was earlier for the slab of Rs 6-9 lakhs.Income between Rs 10-12 lakh will now be taxed at 15 per cent, earlier it was for income between 9-12 lakhs.Tax on income between Rs 12-15 lakh to stay the same at 20 per cent and income above Rs 15 lakh will also stay constant at 30 per cent.It is important to note that with these, a salaried employee under the new tax regime stands to save up to Rs 17,500 annually in income tax.Standard reduction increased from Rs 50,000 to Rs 75,000In addition to this, the finance minister has announced relief on standard deduction which has been hiked from Rs 50,000 currently to Rs 75,000 now. Apart from this, the deduction from family pension of Rs 15,000 is increased to Rs 25,000 under the new tax regime, according to the press release.Deduction under pension schemeThe finance minister has announced raising the amount that an employer must withdraw from employee compensation in order to contribute to the pension plan under section 80CCD from 10 per cent to 14 per cent, which means that instead of the 10 per cent deduction that was previously permitted, non-government employees under the new tax regime will be able to deduct up to 14 per cent of their wage.
