The Budget for fiscal year 2024-25 is scheduled to be presented at 11 a.m. today, July 23, 2024. The full Budget 2024 has been highly anticipated, especially regarding its potential impact on income tax.
While Finance Minister Nirmala Sitharaman has yet to reveal the details in her Parliament speech, here are some key expectations:
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Changes that were expected in Income Tax in Budget 2024
- Increased Tax Exemption Limit: There is strong speculation that the basic exemption limit under the new tax regime may be raised from ₹3 lakh to ₹5 lakh, providing significant relief to lower-income taxpayers.
- Adjustments to the New Tax Regime: The government might introduce modifications to make the new tax regime more appealing, possibly including changes in tax slabs or new deductions.
- Increase in Standard Deduction: A rise in the standard deduction limit could offer additional tax relief to salaried individuals.
- Extension of Tax Benefits: There may be an extension of certain tax benefits or incentives aimed at promoting specific sectors or investments.
Also read: Budget 2024: Govt Cuts Customs Duty on Mobile Phones, Gold, Silver & Platinum
Major Tax Announcements Made by FM in Budget 2024
- Merging of Tax Incentive Regimes: Two tax incentive regimes for the charity sector will be merged into one.
- Corporate Tax Revenue: 58% of corporate tax in FY23 came from the simplified tax regime.
- New Tax Regime Adoption: More than two-thirds of individuals utilized the new tax regime.
- Capital Gains Tax Limit Increased:
- Long-term capital gains on all financial and non-financial instruments will attract a 12.5% tax.
- Short-term gains on certain assets will be taxed at 20%.
- The limit for long-term capital gains tax exemption has been raised to ₹1.25 lakh from ₹1 lakh.
- Angel Tax Exemption: No angel tax will be imposed on all classes of assets.
- Income Tax Assessment Reopening: Assessments can be reopened after 3 years only if escaped income exceeds ₹50 lakh.
- Standard Deduction Increase: The standard deduction limit has been increased to ₹75,000.
- Revised Tax Rates under the New Tax Regime:
- ₹0-3 lakh: Nil tax
- ₹3-7 lakh: 5%
- ₹7-10 lakh: 10%
- ₹10-12 lakh: 15%
- ₹12-15 lakh: 20%
- Above ₹15 lakh: 30%