Union Budget 2024: No income tax for income up to 3 lakhs under new tax regime

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget 2024-25 after the Cabinet gave its approval.

In sops for the middle class, Finance Minister hiked standard deduction by 50 per cent to Rs 75,000 and tweaked tax slabs under the new income tax regime to provide more money in the hands of salaried class with a view to boost consumption. She said salaried employees in the new tax regime could save up to Rs 17,500 in income tax annually following the changes announced in the Budget.

The standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000 annually. Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000 to Rs 25,000.

"This will provide relief to about four crore salaried individuals and pensioners," Sitharaman said in her Budget speech.

In the last fiscal, more than two-thirds individual taxpayers have availed the new personal income tax regime. Over 8.61 crore I-T returns were filed in 2023-24 fiscal.

The new tax slabs under the new income tax regime will be effective from April 1, 2024. (Assessment Year 2025-26).

Sitharaman said income of up to Rs 3 lakh will continue to be exempted from income tax under the new regime.

As per the proposal, a 5 per cent tax will be levied on income between Rs 3-7 lakh, 10 per cent between Rs 7-10 lakh, 15 per cent for Rs 10-12 lakh.
However, 20 per cent tax will continue to be levied on income between Rs 12-15 lakh and 30 per cent for income above Rs 15 lakh.

Under the existing new I-T regime, a 5 per cent tax is levied on income between Rs 3-6 lakh, 10 per cent for income between Rs 6-9 lakh.
Income between Rs 9-12 lakh and Rs 12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively. A 30 per cent I-T would be applicable on income above Rs 15 lakh.

In her intial comments, Sithamraman said India's economic growth will be a shining exception.

"We are determined all Indians regardless of religion and age achieve life goals and aspirations," Sitharman said.

The Finance Minister presented first Union Budget of the Modi 3.0 government and her seventh consecutive one during the Monsoon Session of Parliament.

Union Cabinet headed by Prime Minister Narendra Modi met in Parliament today to approve the Union Budget ahead of its presentation by the Finance Minister.
This would mark Sitharaman's seventh consecutive budget and eclipses the late Moraji Desai's record of six consecutive budgets, which is likely to focus on changes in the income tax structure and improving the ease of doing business in India.

Addressing the media, Minister of State for Finance Pankaj Chaudhary earlier said that the first Union Budget of the third Modi government will be based on his mantra of "Sabka Saath Sabka Vikas".

Union Minister Pralhad Joshi said that this budget would accelerate the country's economic growth.

"The economic growth that happened under the leadership of Prime Minister Narendra Modi, this budget and this Budget will further accelerate it. The budget that will be presented today by Nirmala ji will also help our country, which is the fastest-growing economy," Pralhad Joshi said while speaking to the media on the Parliament premises on Tuesday.

The budget session of Parliament began on July 22 and, according to schedule, will end on August 12.

On Monday, the economic survey presented in Parliament by finance minister Sithraman emphasized the resilience of the Indian economy and its stable post-Covid recovery.

The Survey underscored the government's commitment to "Nari Shakti" through various legislative measures and provisions aimed at boosting women's participation in diverse professions.

According to the Economic Survey, the budget for women's welfare and empowerment schemes has surged by 218.8 per cent, growing from Rs 97,134 crore (BE) in FY14 to Rs 3.10 lakh crore in FY25.

Additionally, the Gender Budget Statement (GBS) has seen a 38.7 per cent increase compared to FY24 BE, with its share in the total Union Budget rising to 6.5 per cent in FY25, the highest since GBS was introduced in FY06.