Key Income Tax Rule Changes Unveiled by Finance Minister Nirmala Sitharaman in the 2024 Budget

Union Budget 2024 Preview: On February 1, 2024, Finance Minister Nirmala Sitharaman will unveil the interim Union Budget for 2024-25. Given the upcoming Lok Sabha Election in April-May, significant announcements are not expected. Explore six noteworthy income tax updates, including changes to the tax regime and rebates, highlighted by Finance Minister Nirmala Sitharaman during the presentation of the Union Budget 2023.

Key Income Tax Changes in Budget 2024:

1) Increased Tax Rebate Limit: The rebate limit in the new tax regime has been raised to ₹7 lakh, ensuring that individuals with incomes up to ₹7 lakh in the new regime won't be liable to pay any tax.

2) Modified Income Tax Slabs: To provide relief to taxpayers in the new regime, the structure has been streamlined with five slabs. The tax exemption limit is now ₹3 lakh, with rates as follows:

   - 0-3 lakh: Nil

   - 3-6 lakh: 5%

   - 6-9 lakh: 10%

   - 9-12 lakh: 15%

   - 12-15 lakh: 20%

   - Above 15 lakh: 30%

3) Standard Deduction Benefit: The benefit of the standard deduction is extended to the salaried class and pensioners under the new tax regime. Salaried individuals receive ₹50,000, while pensioners get ₹15,000.

4) Reduced Surcharge Rate: The highest surcharge rate in personal income tax is reduced from 37% to 25% in the new tax regime for income exceeding ₹2 crore. This lowers the maximum tax rate to 39%, down from 42.74%.

5) Increased Leave Encashment Exemption: The tax exemption limit on leave encashment for non-government salaried retirees is raised from ₹3 lakh to ₹25 lakh.
6) Default Status for New Tax Regime: The new income tax regime is now the default option, but citizens retain the choice to opt for the benefits of the old tax regime.

Also Read: Tax Calendar 2024: Important deadlines for income taxes in January, February, and March

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