The Economic Survey 2023-24 was released on Monday, July 22, 2024, on the first day of the monsoon session of Parliament. Now, Finance Minister Nirmala Sitharaman is set to present her seventh Union Budget 2024-25 at 11 am today (July 23). As there are expectations of announcements on the income tax front, including raising exemption and standard deduction limits, here are the current tax slabs and rates.
Here are full details about the regimes and their tax rates:
In the Budget 2023, under new tax regime, Finance Minister Nirmala Sitharaman had increased the income tax exemption limit by Rs 50,000 to Rs 3 lakh and the rebate under Section 87A of the Income Tax Act, 1961, was also raised from Rs 5 lakh to Rs 7 lakh, meaning that those earning up to Rs 7 lakh do not have to pay any tax under the new regime.
Income Tax Rates for FY2023-24 (AY 2024-25):
Note: For senior citizens (above 60 years of age), the income tax under the old regime is exempt up to Rs 3,00,000; while for super senior citizens (above 80 years), income up to Rs 5,00,000 is exempt.
Apart from this, a health and education cess is levied at 4 per cent on income tax.
Taxpayers have the option to choose either the old tax regime or the new tax regime. The default scheme would be the new tax regime.
Under the new tax regime, a resident individual (whose net income does not exceed Rs 7 lakh) can avail rebate under section 87A. The amount of rebate is 100 per cent of income tax or Rs 25,000, whichever is lower.
Under the old tax regime, a resident individual taxpayer (whose net income is up to Rs 5 lakh) can avail rebate under section 87A. The amount of rebate is 100 per cent of income tax or Rs 12,500, whichever is lower.
Union Budget 2024-25: What’s Expected?
Vivek Jalan, partner at Tax Connect Advisory Services LLP, said, “The government may move towards a ‘Single Hybrid Tax Regime’ as the new taxpayers are already in the new tax regime. It is expected that the exemption slab in the new regime may be extended from the present Rs 3 lakh to Rs 4 lakh at least.”
Further, the established taxpayers with an income of over Rs.15 Lakhs, still continue to embrace the Old regime. It is expected that the Government would also incentivise them to shift to the New Regime. Hence there may be a new slab in the new regime of say Rs 15 lakh — Rs 18 lakh with a tax rate of 25 per cent, he added.
“Slabs of New Tax regime for individuals, HUFs, etc may be rationalised to bring more people (especially established taxpayers) in the new tax regime. This will help the Government to move towards a more exemption free regime while sacrificing some exchequer’s revenue. It will bring more people in the tax net and help increase boost organised sector and reduce un-organised sector. This will boost consumption and help GDP growth of Country, thus also promoting employment generation to cater to the increased demand. On another note, it will help increase GST collections,” Jalan said.
He also expects standard deduction for salaried taxpayers to increase.
“This will help in more cash flow in hands of salaried class. It will boost consumption and help GDP growth of Country, thus also promoting employment generation to cater to the increased demand. Standard deduction was introduced in 2019 and now it is expected that should increase to at least 75,000,” Jalan said.
Stay informed with our comprehensive coverage of Union Budget 2024. Get the latest on new income tax slab rates for AY 2024-25 in Income Tax Slabs Budget 2024 LIVE Updates . Track the impact of Budget 2024 on the stock market in Stock Market Budget Day 2024 LIVE Updates.
Comments
0 comment