Proposed income tax changes in Union Budget 2024 include increased tax exemption and standard deduction limits.
Union Finance Minister Nirmala Sitharaman will present Budget 2024 in the Lok Sabha on Tuesday, July 23. The interim budget, presented on February 1, catered to financial requirements until a new government was formed after the Lok Sabha polls in 2024. Following that, the new government was expected to present a comprehensive budget in July.
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The Union Budget documents will be accessible through the “Union Budget Mobile App”. The bilingual app (English and Hindi) is available on Android and iOS platforms, and can also be downloaded from the Union Budget Web Portal (www.indiabudget.gov.in).
“We have high expectations for significant tax reforms in Budget 2024. Anticipated changes include revised income tax slabs to increase disposable income and stimulate consumer spending by raising the basic exemption limit and adjusting thresholds for higher tax rates,” said Kuljeet Singh, Director of Finance and Accounts, at GI Group Holding.
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Experts list out the possible tax slab changes expected in Budget 2024:
Budget 2024: Changes in new tax regime
Proposed increase in tax exemption and standard deduction limits
The proposed hike in income tax exemption to ₹5 lakh could allow individuals earning up to ₹8.5 lakh annually to avoid paying income tax. Under the new tax regime, the standard deduction limit might also increase from ₹50,000 to ₹1,00,000. According to Gaurav Gunjan, Partner at Gupta Sachdeva & Co., Chartered Accountants, this calculation factors in the standard deduction and the rebate under section 87A, assuming it remains unchanged.
Budget 2024: Changes in the old tax regime
Gaurav Gunjan, Partner at Gupta Sachdeva & Co., Chartered Accountants, indicated that significant changes to the old income tax regime are unlikely, as the government intends to promote the transition of more individuals to the new income tax system.
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Budget 2024: Changes in new income tax regime slab rates
As per Gaurav Gunjan, Partner at Gupta Sachdeva & Co., Chartered Accountants, the projected tax slabs under the new regime are:
The exemption limit is set at ₹5 lakh.
Taxable income between ₹5 lakh and ₹6 lakh is taxed at 5%.
Taxable income between ₹6 lakh and ₹9 lakh is taxed at 10%.
Taxable income between ₹9 lakh and ₹12 lakh is taxed at 15%.
Taxable income between ₹12 lakh and ₹15 lakh is taxed at 20%.
Taxable income above ₹15 lakh taxed at 30%.”
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“As Union Budget 2024 approaches rapidly, anticipated changes to tax slabs hold significant anticipation and importance for both businesses and individuals. With expectations high for the forthcoming announcements, there is optimism that Union Budget 2024 will facilitate a vibrant economic future, fostering business growth and contributing to India’s digital transformation,” said Saif Ahmad Khan, Founder of Luhaif Digitech.
