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Union Budget 2024: Tax Slab Unveiled, Relief for Working Class

Nirmala Sitharaman Announces No Change in Income Tax Exemption Up to 7 Lakhs

February 01, 2024: In a significant move ahead of the Lok Sabha elections, Union Finance Minister Nirmala Sitharaman has provided a substantial relief to the working class by maintaining the provision that income tax payers do not need to pay any income tax up to 7 lakhs under the new tax system. This announcement brings relief to taxpayers, with no alterations made in the existing personal tax structure or tax slab.

Contrary to pre-election expectations, this year’s budget does not introduce new relief measures for taxpayers, except for the continuation of the tax exemption up to 7 lakhs in the new tax system. The income tax will be levied based on the structure announced in the Budget 2023-24.

The taxation structure as per the tax slab is as follows:

  • 0 to 3 lakhs: 0%
  • 3 to 6 lakhs: 5%
  • 6 to 9 lakhs: 10%
  • 9 to 12 lakhs: 15%
  • 12 to 15 lakhs: 20%
  • 30% above 15 lakhs

For those following the old taxation system under HUF, the tax slabs remain unchanged:

  • Up to 2.5 lakhs: No tax
  • 2.5 lakhs to 5 lakhs: 5%
  • 5 lakh to 7 lakh 50 thousand: 10% + 12,500
  • 7 lakh 50 thousand to 10 lakh: 15% + 37,500
  • 10 lakhs to 12 lakhs 50 thousand: 20% + 75,000
  • 12 lakhs 50 thousand to 15 lakhs: 25% + 1,25,000

The new tax slab offers deductions on various fronts, including rent, agricultural income, PPF interest, insurance maturity sum, live encashment on retirement, and more. On the other hand, the old tax slab provides benefits such as deductions on home loan principal and interest, PPF and EPF investments, interest income on deposits, children’s education fees, and various allowances.

In a move to address controversial tax demands, the finance minister announced the waiver of tax claims between 1965 to 2009-10 for taxpayers, benefiting approximately 1 crore individuals.

Additionally, the Modi government has provided a substantial relief to corporate companies by reducing the corporate tax rate from 30% to 22%, resulting in an 8% reduction in the tax burden for these entities.

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