HomeBusinessBudget 2024: Know whether the old income tax changes will benefit you or the new one

Budget 2024: Know whether the old income tax changes will benefit you or the new one

Budget 2024: Know whether the old income tax changes will benefit you or the new one

#News Bureau July 23,2024

Union Finance Minister Nirmala Sitharaman on Tuesday proposed a new tax system under the new system. If implemented, it promises to provide relief to middle-income people, the Finance Minister has said. It is clear that the announcements made by the Finance Minister regarding income tax are going to be implemented.

Presenting the Union Budget for the financial year 2024-25, Sitharaman said that income up to Rs 3 lakh will continue to be exempt from income tax under the new system. According to the proposal, 5 per cent tax will be levied on income of Rs 3-7 lakh, 10 per cent on income of Rs 7-10 lakh and 15 per cent on income of Rs 10-12 lakh. However, income between Rs 12-15 lakh will continue to be taxed at 20 per cent and income above Rs 15 lakh will continue to be taxed at 30 per cent.

Under the new income tax system, the new tax slabs will be effective from April 1, 2024 (assessment year 2025-26). Proposed Income Tax Structure
Income up to ₹3,00,000: Nil
₹3,00,001 – ₹7,00,000: 5% of amount exceeding ₹3,00,000
₹7,00,001 – ₹10,00,000: ₹20,000 + 10% of amount exceeding ₹7,00,000
₹10,00,001 – ₹12,00,000: ₹50,000 + 15% of amount exceeding ₹10,00,000
₹12,00,001 – ₹15,00,000: ₹80,000 + 10% of amount exceeding ₹12,00,000 20%

Above ₹15,00,000: ₹1,40,000 + 30% of the amount exceeding ₹15,00,000

Existing tax structure:

Income up to ₹3,00,000: Nil

₹3,00,001 – ₹6,00,000: 5% of the amount exceeding ₹3,00,000

₹6,00,001 – ₹9,00,000: ₹15,000 + 10% of the amount exceeding ₹6,00,000

₹9,00,001 – ₹12,00,000: ₹45,000 + 30% of the amount exceeding ₹9,00,000 15%
₹12,00,001 – ₹15,00,000: ₹90,000 + 20% of the amount exceeding ₹12,00,000
Above ₹15,00,000: ₹1,50,000 + 30% of the amount exceeding ₹15,00,000

The proposed tax increases the income slabs. Specifically, the 5% slab which has been increased to ₹7 lakh from ₹6 lakh in the current income tax structure. This expansion provides significant tax relief to individuals earning up to ₹7 lakh. However, if the total income does not exceed ₹7,00,000, then a tax exemption of up to Rs 25,000 is already applicable for them under the new system. This tax slab includes middle class people who have a job and their salary.

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