Income Tax Slabs In New Regime Revised In Budget, Savings Up To Rs 17,500; Standard Deduction Limit Also Increased

New Income Tax Slabs In New Tax Regime

• 0 to 3 lakh: Nil tax

• 3 to 7 lakh: 5 per cent

• 7 to 10 lakh: 10 per cent

• 10 to 12 lakh: 15 per cent

• 12 to 15 lakh: 20 per cent

• Over 15 lakh: 30 per cent

Current Income Tax Slabs

For the purpose of comparison, the existing tax slabs in New Tax Regime applicable for Assessment Year 2024-25 are as under:

• 0 to 3 lakh: Nil tax

• 3 to 6 lakh: 5 per cent

• 6 to 9 lakh: 10 per cent

• 9 to 12 lakh: 15 per cent

• 12 to 15 lakh: 20 per cent

• 15 lakh and above: 30 per cent

Standard Deduction Limit Raised

Further, the finance minister announced an increase in the standard deduction available to personal tax payers from FY 2024-25. The standard deduction available under new tax regime has been raised from Rs 50,000 to Rs 75,000.

Also, deduction on family pension has been increased from Rs 15,000 to Rs 25,000.

These proposals will provide relief to 4 crore salaried tax payers and pensioners. A salaried individual will now be able to save up to Rs 17,500 if he/she chooses to file tax return under the New Tax Regime.

Changes In Long-Term And Short-Term Capital Gains

The finance minister also announced in her Budget 2024-25 speech that long-term capital gains on financial and non-financial assets will attract a tax rate of 12.5 per cent. The government has also announced a hike in capital gains exemption limit on certain financial assets to Rs 1.25 lakh per year for middle and upper middle class.

The FM further said during the speech that short-term capital gains on certain financial assets will attract a tax rate of 20 per cent. The minister also announced a hike in STT (securities transaction tax) on F&O (futures and options) securities by 0.02 per cent and 0.1 per cent.

The government has also raised deduction limit to 14 per cent from 10 per cent for employers' contribution for NPS.

The FM announced that the government has undertaken a comprehensive review of the Income Tax Act to make it easy to read.

The minister said it has been the endeavour of the Modi government to simplify taxation and which is why they had introduced the simplified tax regime.

As per data available, last year, a two-third of personal tax payers used the New Tax Regime to file their returns, said Sitharaman. As many as 58 per cent corporates in Financial Year 2022-23 used the simplified tax regime.