Budget 2024: Finance Minister Nirmala Sitharaman has presented the general budget for the financial year 2024-25 in the Lok Sabha on Tuesday, July 23, 2024. In the general budget presented in Parliament, Nirmala Sitharaman has announced a 5 percent tax on income above Rs 3 lakh under the new tax system.
However, under the new tax system, a relief for taxpayers is that Finance Minister Nirmala Sitharaman has announced to increase the standard deduction for salaried employees from Rs 50,000 to Rs 75,000.
5 percent tax on annual income of Rs 3 lakh
Presenting the budget for the 7th consecutive time in the Lok Sabha, Nirmala Sitharaman said that the rates of personal income tax have been revised under the new tax system. She said that under the new tax system, no tax will be levied on income up to Rs 3 lakh annually.
At the same time, 5 percent tax will be levied on annual income of Rs 3 to 7 lakh. Apart from this, under the new tax system, taxpayers will have to pay 10 percent tax on income of Rs 7 to 10 lakh, 15 percent on income of Rs 10 to 12 lakh, 20 percent on income of Rs 12 to 15 lakh and 30 percent tax on income of more than Rs 15 lakh.
Tax on family pension of Rs 25 thousand
Along with this, Nirmala Sitharaman has announced to increase the amount of family pension from Rs 15,000 to Rs 25,000 in the budget presented in the Lok Sabha.
She said that now tax will have to be paid on family pension of Rs 25,000. Apart from this, the Finance Minister has announced to increase the limit of deduction on employer’s contribution for NPS from 10 percent to 14 percent.
Government will review the Income Tax Act
The government announced on Tuesday that it will comprehensively review the Income Tax Act to make it easier to read. Presenting the budget for 2024-25, Finance Minister Nirmala Sitharaman also said that the government will come out with SOPs (standard operating procedures) for TDS defaults. The settlement for such offences will be simplified and rationalised.
She said that two tax exemption regimes for charitable trusts will be merged into one. Apart from this, 58 per cent of corporate tax in FY 2022-23 came from the simplified tax system.
Sitharaman said in the Lok Sabha that more than two-thirds of individuals have availed the new income tax regime. The Finance Minister announced that DPI apps will be developed for credit, e-commerce, education, health, law, MSME service delivery and urban governance.
