In the budget speech in February 2024, the current Finance Minister of India – Nirmala Sitaraman made some changes in the tax laws. The changes will come into effect from the new fiscal which starts on April 1.
Sitaraman also mentioned that there will be default adoption of the new tax regime. That implies, that from April 1, 2024, if an individual has not opted for the old tax regime, the employer would be deducting tax on salary (TDS) based on the new tax regime.
Salient features of the new tax regime
1. Taxpayers will have the leeway to choose either the old tax regime or the new one according to their feasibility.
2. The income tax slab according to this new regime will look like this: –
- 0 to 3 Lakh- 0 percent tax
- 3 to 6 Lakh – 5 percent tax
- 6 to 9 – 10 percent tax
- 9 to 12 – 15 percent tax
- 12 to 15 – 20 percent tax
- 15 & above – 30 percent tax
3. The highest surcharge, which was 37 percent in the previous financial year has been reduced to 25 percent for individuals earning more than Rs 5 crore. Through this reduction in the percentages, the individual in this category will now face a lower tax rate.
4. Standard Deduction of INR 50,000 which was a key feature in last year’s budget has also been inculcated in this year’s budget. This means that the employees and pensioners can claim a deduction of the above-mentioned amount in their tax amount.
5. The leave encashment tax exemption limit for non-government employees has been increased to INR 25 Lakh, which was INR 3 lakh till now.
6. A tax rebate has been imposed on an income of Rs. 7 Lakh. Under Section 87A, your tax liability will become nil if you avail of the rebate.
7. Maturity proceeds from life insurance policies that are issued from or after April 1, 2023, and if the total premium surpasses ₹ 5 lakh, will be subjected to taxation.
The new tax regime promises the citizenry a streamlined tax filing procedure and greater participation with a simplified taxation system.
Opposition’s Reaction after the announcement of the Budget
Just after the announcement of the budget for the new fiscal year by Sitaraman in February, the opposition made several comments on the finance minister’s decision.
At the Jaipur Literature Festival Sachin Pilot, the Congress general secretary in-charge of Chhattisgarh said, “This was an interim budget. The budget speech was more political and had no relief for the common man. It was more of a political statement to praise the government which they do generally at every event. This budget had nothing to do with farmers and youngsters.”
Samajwadi Party chief Akhilesh Yadav called the budget ‘useless’ as he tweets,” There is no budget if not for development and no development if it is not for the people. If it still exists, then it is useless. The BJP government has created a shameful record by completing a decade of anti-people budgets, which will never be broken again because now is the time for a positive government to come. This is BJP’s ‘farewell budget.” (translated from hindi)
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