In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced an increase in the standard deduction for salaried individuals and pensioners under the new tax regime from ₹50,000 to ₹75,000, effective from the financial year 2024-25.
This enhancement aims to provide greater relief to taxpayers opting for the new tax regime.
Key Points:
New Tax Regime: The standard deduction has been increased to ₹75,000, offering additional relief to salaried taxpayers and pensioners.
Old Tax Regime: The standard deduction remains unchanged at ₹50,000.
Implications:
Salaried Individuals and Pensioners: Those opting for the new tax regime will benefit from a higher standard deduction, reducing their taxable income by an additional ₹25,000 compared to the previous provision.
Tax Planning: Taxpayers should evaluate both regimes to determine which offers greater tax benefits, considering the increased standard deduction in the new regime and the availability of various exemptions and deductions in the old regime.
Example:
For a salaried individual earning ₹10,00,000 annually:
Old Tax Regime:
Gross Income: ₹10,00,000
Standard Deductions : ₹50,000
Taxable Income: ₹9,50,000
New Tax Regime (FY 2024-25 onwards):
Gross Income: ₹10,00,000
Standard Deductions : ₹75,000
Taxable Income: ₹9,25,000
This adjustment results in a lower taxable income under the new regime, potentially reducing the overall tax liability.
Conclusion:
The increase in the standard deduction to ₹75,000 under the new tax regime is a significant move to make it more attractive to taxpayers. Individuals should assess their financial situations, considering factors like eligible deductions, exemptions, and income levels, to choose the most beneficial tax regime.
new tax regime is beneficiary for indian Middle class income tax payers. Increased in standard deductions will help taxpayers to save taxes. Government aims to simply the tax structure and also want to consider the taxpayers demand in new tax regime. Compare old tax regime with new tax regime and calculate your tax amount using tax calculator.
