Union Finance Minister Nirmala Sitharaman on Tuesday announced multiple changes to the tax structure for salaried individuals and pensioners opting for the new tax regime. Presenting the Union Budget 2024-25, Nirmala Sitharaman announced the proposal to increase the standard deduction for salaried employees from Rs 50,000 to Rs 75,000. Further, the deduction on family pension for pensioners was enhanced from Rs 15,000 to Rs 25,000 under the new tax regime.
She stated that these measures would offer relief to about 4 crore salaried individuals and pensioners in the country. With the latest announcement, salaried employees will be able to save up to Rs 17,500 annually in the new tax regime. Besides, Ms Sitharaman also tweaked tax slabs in the new regime.
So, how much will you be able to save on income tax? Let's understand different scenarios.
Current tax structure
The current tax slabs under the new tax regime are as follows:
0 to Rs 3 lakh - Nil
Over Rs 3 lakh up to Rs 6 lakh - 5 per cent
Over Rs 6 lakh up to Rs 9 lakh - 10 per cent
Over Rs 9 lakh up to Rs 12 lakh - 15 per cent
Over Rs 12 lakh up to Rs 15 lakh - 20 per cent
Rs 15 lakh and more - 30 per cent
Proposed tax structure
0 to Rs 3 lakh - Nil
Over Rs 3 lakh up to Rs 7 lakh - 5 per cent
Over Rs 7 lakh up to Rs 10 lakh - 10 per cent
Over Rs 10 lakh up to Rs 12 lakh - 15 per cent
Over Rs 12 lakh up to Rs 15 lakh - 20 per cent
Rs 15 lakh and more - 30 per cent
Earlier, a salaried employee earning Rs 10 lakh per annum was supposed to pay an income tax of roughly Rs 52,500 under the new regime. Under the revised tax slabs in the new tax regime, he/she will have to pay around Rs 42,500.
The revised tax structure widens the income slabs, especially extending the 5 per cent slab up to Rs 7 lakh, compared to Rs 6 lakh in the current scenario. Further, it extends the 10% slab up to Rs 10 lakh.
Meanwhile, the Finance Minister in her Budget speech also announced a "comprehensive review" of the Income Tax Act, 1961.
"This will reduce disputes and litigation. It is proposed to be completed in six months," she noted.
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