When it comes to Budget, the only thing that the salaried class looks forward to is the income tax rebate. Finance Minister Nirmala Sitharaman while presenting Interim Budget 2024 on 1 February 2024, kept the tax slab rates unchanged for both new and old income tax regimes.
“Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” Sitharaman said in her Budget speech on Thursday, 1 February 2024.
“The Finance Minister’s decision to not tinker with personal income tax slabs and rates in the Interim Budget is understandable from a prudence perspective. With global headwinds persisting, fiscal consolidation needs to balance against adequate capital expenditure to nurture growth,” said Ashish Aggarwal, Director, Acube Ventures.
However, individual taxpayers were expecting some relief given elevated inflationary pressures and recessionary undertones in major world economies. “Salaried professionals in particular have faced the double whammy of job market uncertainties and higher living costs without proportionate pay hikes from employers. Aspects like a higher standard deduction, enhanced housing loan interest exemptions, or a tweaking of 80C instruments would have provided some cushion. So some disappointment in personal taxation among the salaried class is valid,” said Ashish Aggarwal.
No tax would be levied for income up to ₹3 lakh
-Income between ₹3-6 lakh would be taxed at 5 per cent (tax rebate under Section 87A is available)
-Income between ₹6-9 lakh would be taxed at 10 per cent (tax rebate under Section 87A on income up to ₹7 lakh is available)
-Income between ₹9-12 lakh at 15 per cent
-Income between ₹12-15 lakh at 20 per cent
-Income of ₹15 lakh and above will be taxed at 30 per cent.
The tax rates in the new tax regime are the same for all categories of Individuals, i.e. Individuals, Senior citizens, and Super senior citizens.
Old regime tax slabs
1) Income up to ₹2.5 is exempt from taxation under the old tax regime.
2) Income between ₹2.5 to ₹5 lakh is taxed at the rate of 5 per cent under the old tax regime.
3) Personal income from ₹5 lakh to ₹10 lakh is taxed at a rate of 20 per cent in the old regime
4) Under the old regime personal income above ₹10 lakh is taxed at a rate of 30 per cent.
In the old tax regime, the income tax exemption limit is up to ₹3 lakh for senior citizens aged above 60 years but less than 80 years, and up to ₹5 lakh for super senior citizens aged above 80 years.
The middle class was eagerly awaiting some income tax reforms that would enable them to curtail their tax outgo.
The full budget will be presented in July by the incoming government, whether a re-elected or new one.
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Published: 01 Feb 2024, 11:56 AM IST