Income Tax Slabs - Budget 2024 Tax Changes LIVE Updates: Budget 2024 announces new tax slabs under the new income tax regime. It also increased the standard deduction limit to Rs 75,000 from Rs 50,000 under the new regime. Budget 2024 also simplified capital gains tax for investors. All you need to know about Budget income tax rule changes
Income Tax Slabs Budget 2024 Tax Changes LIVE Updates: Finance Minister Nirmala Sitharaman announced a host of measures for taxpayers in Budget 2024. Here are all the key announcements you must know. BankBazaar says, "With slight enhancements in the standard deduction, new tax regime slabs, and the hike in the tax-free LTCG, your tax-free income is marginally higher. However, that comes with a higher tax rate on LTCG and STCG, which could significantly impact your your earnings from capital gains."
Budget 2024: Standard deduction limit hiked in the new tax regime
To make the new tax regime more attractive, Budget 2024 raised the basic exemption limit to Rs 75,000 from Rs 50,000 in the new tax regime. This allows taxpayers to have a higher disposable income. Rajarshi Dasgupta, Executive Director, AQUILAW says, "The standard deduction in the new regime increased from Rs 50,000 to Rs 75,000. However no change has been prescribed in the standard deduction in the old tax regime."
Budget 2024 LIVE Updates: New income tax slabs under the new income tax regime
The new income tax slabs announced in the Budget 2024 are as follows:
Up to Rs 3 lakh - 0%
Rs 3 lakh to Rs 7 lakh - 5%
Rs 7 lakh to Rs 10 lakh - 10%
Rs 10 to Rs 12 lakh - 15%
Rs 12 to Rs 15 lakh - 20%
Above Rs 15 lakh - 30%
Dipesh Jain, Partner, Economic Laws Practice, says, "While the base exemption limit of Rs 3 lakh has remained unchanged, which was expected to be increased marginally, the 5% tax slab is proposed to be expanded by Rs 1 lakh that is Rs 3 lakh to 7 lakh from the existing slab of Rs 3 lakh to Rs 6 lakh. The highest tax slab of 30% continues to be status quo i.e. more than Rs 15 lakh. Accordingly, there would be a marginal relief of Rs 17,500 for individual tax-payers opting for new regime. This would further enhance the attractiveness of the new tax regime as compared to the old tax regime, where there are no relaxations proposed.
Budget 2024 LIVE Updates: Capital gains tax structure changes
Budget 2024 has done a comprehensive review of capital gain structure, whereby several changes have been proposed relating to limiting class of holding periods, tax rates and removal of indexation benefit for different class of capital assets.
For listed equity share and equity oriented mutual funds, tax rate has been increased from 10% to 12.5%. However, exemption limit has been raised from 1 lakh to 1.25 lakh. Other long term capital assets like gold, property which were taxed at 20% with indexation, the tax rate has been reduced to 12.5% but indexation benefit has been removed
There will be only two holding periods of one year and two years for different class of assets, as against three holding periods i.e. one, two and three years.
So far as short term capital gain for STT paid equity shares and equity oriented mutual funds is concerned, tax rate has been increased from 15% to 20%. Above changed will increase the tax outlay for equity investors.
Suresh Surana, a Chartered Accountant says, "As regards capital gains, while there are measures which would result in simplification, there is an increase in tax rate for short term gains on certain financial assets which shall henceforth attract a tax rate of 20% (earlier 15%), while that on all other financial assets and all non-financial assets will continue to attract the applicable tax rate. Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5%. Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term. Unlisted bonds and debentures, debt mutual funds and market linked debentures, irrespective of holding period, however, will attract tax on capital gains at applicable rates."
Budget 2024 LIVE Updates: NPS Vatsalya scheme announced
Yogesh Kale, Executive Director, Nangia Andersen LLP says, "FM Nirmala Sitharaman has announced NPS Vatsalya scheme for investment by parents for their children, under which the account can be transferred to the child on attaining majority. The unique feature of this proposal is the possibility of seamless conversion of the account to a non-NPS account on the child attaining majority. This will be a good avenue for parents to secure the future of their children and provide for their higher education."
Shailesh Kumar, Co-Founder and Insurance Head, Insurance Samadhan, "The government’s decision to increase the standard deduction for salaried employees from Rs 50,000 to Rs 75,000 and deductions on a family pension could promote savings. Similarly, reforms in the new tax regime will now enable salaried employees to save up to Rs. 17,500 in their income tax. I believe such a move could encourage more individuals to mobilize their savings and avail of comprehensive insurance coverage as per their needs, especially when medical inflation is soaring at an alarming rate."
