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Kajal Agrawal

New Income Tax Regime In Budget 2024: What's In It For Middle Class? Explained New Vs Old Regime Featured

  23 जुलाई 2024

Finance Minister Nirmala Sitharaman presented the maiden budget for Modi 3.0, unveiling income tax slabs aimed at providing relief to taxpayers.

In a move that will impact millions of taxpayers, the Indian government has raised the standard deduction under the new tax regime from Rs 30,000 to Rs 75,000. This change is expected to result in a substantial saving of Rs 17,500 for eligible taxpayers, aiming to provide more disposable income and stimulate spending.

 

New Tax RegimeUnder the new tax regime, income up to Rs 3 lakh will be exempt from tax. For income between Rs 3 lakh and Rs 7 lakh, the tax rate will be 5%. Income ranging from Rs 7 lakh to Rs 10 lakh will be taxed at 10%, while income between Rs 10 lakh and Rs 12 lakh will attract a 15% tax rate. For those earning between Rs 12 lakh and Rs 15 lakh, the tax rate will be 20%.

Old Tax Regime

This marks a departure from the previous tax regime, where income up to Rs 5 lakh was tax-free. Under the old slabs, income from Rs 5 lakh to Rs 7.5 lakh was taxed at 10%, from Rs 7.5 lakh to Rs 10 lakh at 15%, from Rs 10 lakh to Rs 12.5 lakh at 20%, and from Rs 12.5 lakh to Rs 15 lakh at 25%.

Securities Transaction Tax (STT) HikeThe Modi government has also announced that Securities Transaction Tax (STT) has been doubled from 0.1% to 0.2%. This increase also extends to Futures & Options (F&Os), with the STT on futures set to rise to 0.02% and on options to 0.01%. These adjustments are likely to affect traders and investors, potentially leading to higher transaction costs in the financial markets.

Simplified Capital Gains TaxationCapital gains taxation is set to undergo a major overhaul. Short-term capital gains will now be taxed at a flat rate of 20%, while long-term capital gains (LTCG) will be reduced to 12.5% for certain assets.

 

 

 

 

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