Budget 2024: New tax regime slabs revised, standard deductions hiked by ₹25,000

New tax regime slabs will be changed and standard tax deduction increased from 50,000 to 75,000.

Finance minister Nirmala Sitharaman said that new tax regime slabs will be changed and standard tax deduction increased from 50,000 to 75,000. The deduction, however, will remain unchanged at ₹50,000 under the old tax regime. For family pensioners, the deduction will go up from ₹15,000 to ₹25,000 under the new regime, Nirmala Sitharaman said.

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2024-25 in the Lok Sabha, in New Delhi. (PTI)

This move will benefit four crore salaried individuals and pensioners, she said.

The revised slabs are as follows:

Up to 3,00,000: Nil

From 3,00,001 to 7,00,000: 5%

From 7,00,001 to 10,00,000: 10%

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From 10,00,001 to 12,00,000: 15%

From 12,00,001 to 15,00,000: 20%

Above 15,00,000: 30%

Owing to this, Nirmala Sitharaman said, ₹17,500 will be saved by those opting for the new regime. The Finance Minister also announced a comprehensive review of the Income Tax Act of 1961, which will make it easier to read and understand and reduce uncertainty and potential for litigation.

Nirmala Sitharaman promised measures to simplify tax regime for individual income tax-payers, in line with measures taken over the years. She also reiterated government's focus on simplifying tax structures and rules and said that more than two-third personal tax-payers have availed of the new tax regime in financial year 2023-24.

Nirmala Sitharaman also announced a Vivaad to Vishwas scheme 3.0 for 2024.

The National Pension System (NPS) deduction on employers' contribution to employees' basic salary has been raised from 10 per cent to 14 per cent. This will apply to public sector companies, private sector under the new regime, the finance minister said.