“Currently, those with an income of Rs 5 lakhs do not pay any income tax and I proposed to increase the rebate limit to Rs 7 lakhs in the new tax regime,” Finance Minister Nirmala Sitharaman said while presenting the Budget.
Today, Narendra Modi Government presented Union Budget ahead of the 2024 elections. Union Finance Minister Nirmala Sitharaman announced new tax slabs for FY24.
As per the new regime, the tax rebate has been increased from Rs 5 lakh to Rs 7 lakh.
“Currently, those with an income of Rs 5 lakhs do not pay any income tax and I proposed to increase the rebate limit to Rs 7 lakhs in the new tax regime,”
the finance minister said while presenting the Budget.
While a five per cent tax will be imposed on total income between Rs 3 lakh and Rs 6 lakh, 10 per cent will be levied on Rs 6 lakh to Rs 9 lakh, 15 per cent on Rs 9 lakh to Rs 12 lakh, 20 per cent on Rs 12 lakh to Rs 15 lakh and 30 per cent on Rs 15 lakh and above.
The finance minister did not announce any change in income tax slabs in the last Budget. As the current income slab as well as the tax rates under the regular tax regime stays unchanged, the salaried class is now looking forward to the income tax rebate.
The finance minister had, last month, took a stand for New Income Tax Regime, saying it had not reversed any gains from the old regime’s simplicity. “If indeed there were gains of simplicity (from the old income tax regime), I want to assure they have not been reversed,”
Sitharaman said in the parliament.
“For every tax assessee, it has 7, 8, 9, 10 exemptions. And with all that exemptions, the rate 10, 20, 30 per cent continues. It continues even today. We have not removed it. What we have done in the name of simplicity and to avoid harassment… removing harassment was what was aimed at when we brought in faceless tax assessment,”
In the 2020-21 Budget, the government brought in an optional income tax regime under which individuals and Hindu Undivided Families were to be taxed at lower rates if they did not avail of specified exemptions and deductions, such as house rent allowance, interest on home loan and investments under Section 80C. Under this, total income up to Rs 2.5 lakh will be tax-exempt.
Under the old system, income up to Rs 2.5 lakh is exempt from personal income tax. Income between Rs 2.5 lakh and Rs 5 lakh attracts a 5 percent tax, while 20 percent tax is levied for income between Rs 5 lakh and Rs 10 lakh. Income above Rs 10 lakh is taxed at 30 percent.