Budget 2024: According to a senior finance ministry official, the New Tax Regime, which will be unveiled on February 1, would not result in any increases to tax rebates under the Interim Budget 2024. There were earlier rumours that taxpayers who choose for the New Tax Regime would see their personal income tax rebate rise from the current Rs 7 lakh to Rs 7.5 lakh in the vote-on-account.
Clarification on Rumors
“There is no such proposal,” the official told Moneycontrol. For assessees choosing the new direct tax regime, FM Nirmala Sitharaman raised the threshold for income tax rebate from Rs 5 lakh to Rs 7 lakh last year. Additionally, the basic exemption amount was raised from Rs 2.5 lakh to Rs 3 lakh. Additionally, the Centre instituted a Rs. 15,000 family pension deduction. The standard deduction clause was implemented in Budget 2023 for salaried individuals, retirees, and family pensioners under the new tax regime.
Standard Deduction for Pensioners and Salaried Workers
Pensioners and salaried workers presently receive a standard deduction of Rs 50,000 under the previous tax system. According to another official, the interim budget is anticipated to include an announcement by the Centre exempting individual foreign credit and debit card spending up to Rs 7 lakh per financial year from tax collected at source (TCS).
Introduction of Modified Tax Slabs and Concessional Rates
With the introduction of modified tax slabs and concessional tax rates, the New Tax Regime was implemented. All taxpayers, including individuals, Association of Persons (AOPs), and Hindu Undivided Families (HUFs), are subject to it. The income tax slabs were lowered from seven to six in Budget 2023 in an attempt to simplify the personal income tax regulations.
- There is no tax on income under Rs 3 lakh.
- It is five percent for income over Rs 3 lakh and up to Rs 6 lakh
- It is 10% of the amount over Rs 6 lakh to Rs 9 lakh
- 15% of the amount over Rs 9 lakh to Rs 12 lakh
- It is 20% beyond Rs. 12 lakh to Rs. 15 lakh
- If you exceed Rs 15 lakh, thirty percent
Exclusions under New Tax Regime
It is explicitly stated by the government that people who select the New Tax Regime will not be eligible for a number of exemptions and deductions, such as HRA, LTA, 80C, 80D, and others, which are only available under the Old Tax Regime.
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