The Standard Deduction limit has been raised to Rs 75,000 by the government, allowing those employed to potentially save up to Rs 17,500 in taxes under the new system, up from the previous Rs 50,000. There were expectations for an increase to Rs 1 lakh.
In addition, Finance Minister Nirmala Sitharaman has proposed an increase in the long-term capital gains tax from 10% to 12.5% in the 2024-25 Budget.
A thorough review of the Income Tax Act has also been announced. The aim is to simplify tax regulations and potentially offer further relief to taxpayers, thereby increasing their disposable income.
The new tax regime tax rate structure is to be revised as follows:
0-3 Lakh – 0%
3-7 Lakh – 5%
7-10 Lakh – 10 %
10 - 12 Lakh – 15 %
12 - 15 Lakh – 20%
Over 15 Lakh – 30%
Sitharaman said that the government will undertake a comprehensive review of the Income Tax Act to make it easy to read.
Presenting the Union Budget for 2024-25, Finance Minister Nirmala Sitharaman also said the government will develop an SoP (standard operating procedure) for TDS defaults and simplify and rationalise the compounding of such offences.
She added that two tax exemption regimes for charitable trusts will be merged into one.
Also, 58 per cent of corporate tax came from a simplified tax regime in FY23.
More than two-thirds of individuals were availed of the new income tax regime, Sitharaman said in Lok Sabha.
The FM further announced that DPI apps will be developed for credit, e-commerce, education, health, law, MSME service delivery, and urban governance.
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