The Union Budget 2024, being an interim budget, aims to provide some immediate tax relief, especially for the middle class. Here is a detailed account of the key changes made:
Focus on the New Tax Regime (NTR)
The government has put a lot of emphasis on making NTR more attractive for taxpayers. The major changes affecting individuals are as follows:
Increased standard deduction: A big benefit for salaried individuals. The standard deduction under NTR has been increased from ₹50,000 (US$600) to ₹75,000 (US$900). This effectively reduces your taxable income, potentially leading to tax savings of up to ₹17,500 (US$210) annually.
Union Budget 2024
Revised tax slabs: The budget introduced a revised tax slab structure for NTR. This means that the income thresholds for each tax rate have been adjusted:
Income up to ₹3 lakh – zero tax (increased from ₹2.5 lakh)
Income between ₹3 lakh and ₹7 lakh – 5% tax (increased from ₹5 lakh)
Income between ₹7 lakh and ₹10 lakh – 10% tax (remained unchanged)
Income between ₹10 lakh and ₹12 lakh – 15% tax (remained unchanged)
₹12 lakh and ₹15 lakh – 20% tax (remained unchanged) Income above Rs 15 lakh – 30% tax (remained unchanged) Other tax-related measures:
Abolition of angel tax: This was a significant move for startups. Previously, angel investors investing in unlisted companies faced the prospect that the investment amount would be taxed as income if the company did not make a profit within a certain time frame. Abolishing angel tax removes this hurdle and encourages investment in early-stage businesses.
Resources for Further Information
- Ministry of Finance, Government of India: https://www.indiabudget.gov.in/
- Income Tax Department, Government of India: https://www.incometax.gov.in/iec/foportal/
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