Updates in Income Tax and Deductions in Budget 2024
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, introduced several significant changes to the income tax structure and deductions. Here’s a comprehensive overview of the key updates:
1. New Income Tax Slabs
The new tax regime has been revised to provide relief to taxpayers. The updated slabs are as follows:
- Up to ₹3 lakh: Nil
- ₹3 lakh to ₹7 lakh: 5%
- ₹7 lakh to ₹10 lakh: 10%
- ₹10 lakh to ₹12 lakh: 15%
- ₹12 lakh to ₹15 lakh: 20%
- Above ₹15 lakh: 30%
2. Standard Deduction
The standard deduction for salaried individuals and pensioners has been increased from ₹50,000 to ₹75,000. Additionally, the deduction for family pensioners has been raised from ₹15,000 to ₹25,000.
3. Capital Gains Tax
The capital gains tax regime has undergone significant changes:
- Short-Term Capital Gains (STCG): Taxed at 20% on certain financial assets.
- Long-Term Capital Gains (LTCG): Taxed at 12.5% on all financial and non-financial assets.
- Exemption Limit: Increased from ₹1 lakh to ₹1.25 lakh.
4. National Pension System (NPS)
The deduction on the employer’s contribution to NPS for private sector employees has been increased from 10% to 14% of the salary.
5. Securities Transaction Tax (STT)
The STT on Futures and Options has been increased to 0.02% and 0.1%, respectively.
6. Angel Tax
The angel tax has been abolished for all taxpayers, making it easier for startups to raise capital.
7. Other Key Changes
- TDS and TCS Rates: Adjustments in the rates of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
- Vivad Se Vishwas Scheme 2024: Introduced to reduce litigation and settle direct tax disputes.
- Review of Income Tax Act: A comprehensive review of the Income Tax Act, 1961, is planned for simplification and certainty.
Conclusion
The Budget 2024 aims to simplify the tax structure, provide relief to the middle class, and support economic growth. These changes are expected to have a positive impact on taxpayers and the overall economy.
Feel free to share your thoughts or ask any questions about these updates!
