The Union Budget for 2024 has brought about several noteworthy changes to the income tax slabs 2024 in India. The modifications aim to streamline the tax structure, provide relief to taxpayers, and encourage compliance. Exploring the Changes in Income Tax & Detailed Insights from Budget provides an exhaustive look at the revised income tax slabs and their implications for various categories of taxpayers, including individuals, senior citizens, and super senior citizens.
Key Highlights of Union Budget 2024
Finance Minister Nirmala Sitharaman presented the Union Budget 2024 with a focus on enhancing economic growth, supporting the middle class, and ensuring a fair tax regime. One of the pivotal aspects of this budget is the revision of income tax slabs, which have been structured to benefit a wider range of taxpayers.
New Income Tax Slabs for Individuals Below 60 Years
For individuals below the age of 60, the revised tax slabs are as follows:
- Income up to ₹2.5 Lakhs: No tax is levied on income up to ₹2.5 lakhs. This slab remains unchanged, providing basic tax relief to the lower-income segment.
- Income between ₹2.5 Lakhs and ₹5 Lakhs: A 5% tax rate applies to this income bracket. Additionally, individuals in this slab can benefit from the rebate under Section 87A, effectively making their tax liability zero if their total income does not exceed ₹5 lakhs.
- Income between ₹5 Lakhs and ₹7.5 Lakhs: The tax rate for this bracket has been reduced from 20% to 10%, offering significant relief to middle-income earners.
- Income between ₹7.5 Lakhs and ₹10 Lakhs: A 15% tax rate is applicable, reduced from the previous 20%, further alleviating the tax burden.
- Income between ₹10 Lakhs and ₹12.5 Lakhs: Income in this range is taxed at 20%, down from the earlier 30%, providing substantial savings for taxpayers.
- Income between ₹12.5 Lakhs and ₹15 Lakhs: The tax rate for this bracket is set at 25%.
- Income above ₹15 Lakhs: The highest tax slab remains at 30%, ensuring that higher-income individuals contribute a fair share to the national exchequer.
Income Tax Slabs for Senior Citizens (60 Years and Above)
Senior citizens, who often have limited income sources post-retirement, are given higher exemption limits and concessional rates to ease their financial burden. The revised slabs for senior citizens are as follows:
- Income up to ₹3 Lakhs: No tax is levied, providing complete relief on income up to ₹3 lakhs.
- Income between ₹3 Lakhs and ₹5 Lakhs: A tax rate of 5% is applicable.
- Income between ₹5 Lakhs and ₹7.5 Lakhs: The tax rate for this bracket is 10%, reduced from the previous 20%, offering considerable savings.
- Income between ₹7.5 Lakhs and ₹10 Lakhs: Income in this range is taxed at 15%, down from the earlier 20%.
- Income between ₹10 Lakhs and ₹12.5 Lakhs: A 20% tax rate is applied, providing relief as it is reduced from the previous 30%.
- Income between ₹12.5 Lakhs and ₹15 Lakhs: The tax rate for this bracket is 25%.
- Income above ₹15 Lakhs: Income above ₹15 lakhs is taxed at 30%.
Income Tax Slabs for Super Senior Citizens (80 Years and Above)
Recognizing the increased financial challenges faced by super senior citizens, the government has provided even higher exemption limits and concessional tax rates. The revised slabs for super senior citizens are as follows:
- Income up to ₹5 Lakhs: No tax is levied, offering full exemption on income up to ₹5 lakhs.
- Income between ₹5 Lakhs and ₹10 Lakhs: A 10% tax rate is applicable, significantly reduced from the previous 20%.
- Income between ₹10 Lakhs and ₹12.5 Lakhs: The tax rate is 15%, down from the earlier 30%, providing substantial relief.
- Income between ₹12.5 Lakhs and ₹15 Lakhs: Income in this range is taxed at 20%, offering further savings as it is reduced from the previous 30%.
- Income above ₹15 Lakhs: A 30% tax rate is applied.
Impact of the Revised Tax Slabs
The revised tax slabs for Budget 2024 are designed to benefit a wide spectrum of taxpayers. Here are some key impacts:
- Increased Disposable Income: The reduction in tax rates across various income brackets means that taxpayers will have more disposable income. This could lead to increased consumer spending, stimulating economic growth.
- Encouragement for Compliance: Simplified tax slabs and reduced rates are likely to encourage more individuals to file their tax returns accurately and on time, improving tax compliance rates.
- Support for Middle-Class: The middle-income group, which forms a significant part of the taxpayer base, will benefit the most from the reduced tax rates. This support can help in alleviating financial stress and promoting savings and investments.
- Relief for Senior Citizens: Higher exemption limits and reduced tax rates for senior and super senior citizens recognize their limited income sources and increased medical and living expenses, providing much-needed financial relief.
Other Notable Changes and Benefits
Apart from the revised tax slabs, Budget 2024 includes several other provisions and benefits to further support taxpayers:
- Standard Deduction: The standard deduction for salaried individuals has been increased to ₹75,000 from the earlier ₹50,000, providing additional relief.
- Deductions Under Section 80C: The limit for deductions under Section 80C remains at ₹1.5 lakhs, covering investments and payments such as life insurance premiums, employee provident fund (EPF), public provident fund (PPF), and tuition fees for children.
- Health Insurance Premiums: Deductions for health insurance premiums under Section 80D have been enhanced, with the limit for individuals below 60 years set at ₹50,000 and for senior citizens at ₹1 lakh.
- Home Loan Interest: The deduction limit for home loan interest under Section 24(b) remains at ₹2 lakhs, encouraging homeownership.
Simplified Tax Filing Process
To further ease the tax filing process, the government has introduced several measures:
- Pre-filled ITR Forms: Taxpayers will receive pre-filled income tax return (ITR) forms with information on salary income, capital gains, dividends, and interest income, simplifying the filing process.
- Faceless Assessments: The faceless assessment system will continue to be strengthened, ensuring transparency and reducing the scope for corruption and harassment.
