Union Budget 2024: Nirmala Sitharaman hikes std tax deduction to Rs 75,000

Nirmala Sitharaman/ PTI

Finance Minister Nirmala Sitharaman, during her Union Budget 2024, announced significant changes to personal income tax rates and deductions. She said it will offer relief to millions of salaried employees and pensioners.

She, in the Union Budget 2024 presentation, announced that the standard deduction for salaried employees will be increased from Rs 50,000 to Rs 75,000. She further stated that for pensioners, the deduction of family pension will rise from Rs 15,000 to Rs 25,000.

Coming to Personal Income Tax Rates, I have two announcements to make for those opting for the new tax regime. First, the standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000. Similarly, the 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.

The tax rates in the new regime will be adjusted, said Sitharaman who added that with these revisions, a salaried employee in the new tax regime could save up to Rs 17,500 in income tax.

The arrangement is as follows:

0-3 lakh rupees: Nil

3-7 lakh rupees: 5 per cent

7-10 lakh rupees: 10 per cent

10-12 lakh rupees: 15 per cent

12-15 lakh rupees: 20 per cent

Above 15 lakh rupees: 30 per cent

"As a result of these proposals, revenue of about Rs 37,000 crore -Rs 29,000 crore in direct taxes and Rs 8,000 crore in indirect taxes - will be forgone while revenue of about Rs 30,000 crore rupees will be additionally mobilized. Thus, the total revenue forgone is about Rs 7,000 crore annually," Sitharaman said in her Union Budget 2024 speech.

Meanwhile, Sitharaman, as a part of her Union Budget 2024 speech, announced an increase in both long-term and short-term capital gains tax. She, per the ANI report, announced that short-term capital gains on "specified" financial assets will hereforth attract a tax rate of 20 per cent instead of 15 per cent. She added that other financial and non-financial assets shall continue to attract the "applicable tax rate".

With ANI inputs