Finance Minister Nirmala Sithraman suggested raising the Standard deduction for professionals enrolled in the new tax regime from Rs. 50,000 to Rs. 70,000, which would be a significant benefit for working professionals.
The phrase describes the one-time, flat deduction of Rs 50,000 from a salaried person’s taxable pay income.
First, it is suggested to raise the standard deduction for paid workers from Rs 50,000 to Rs 75,000. In a similar vein, the finance minister recommended raising the family pension deduction for retirees from Rs 15,000 to Rs 25,000. He said that this policy will help four crore salaried workers and pensioners.
No documentation of the actual costs spent is needed. It is important to remember that the standard deduction is allowed under both the previous and current income tax systems.
It is advantageous because the Standard Deduction is intended to lower individuals’ taxable income and pay for certain costs related to their job. Most recently, in 2019, the standard deduction was updated. Given the increase in living expenditures, many analysts believed that the flat deduction would be changed before the budget was presented.
On Tuesday, the finance minister tabled the 2024 Union Budget in the parliament. What makes the sacrosanct document so significant is the fact that this is the first budget of the Modi 3.0 government that came to power in the 2024 Lok Sabha General Elections.
It is pertinent to note that this will be the seventh budget presented by Sitharaman, the most by any Indian finance minister in the country’s history.
Income vs Tax
While dwelling more on personal income tax, Sitharaman introduced the following tax rate structure. They are as follows:
| 0-3 LAKH RUPEES | NIL |
|---|---|
| 3-7 lakh rupees | 5 per cent |
| 7-10 lakh rupees | 10 per cent |
| 10-12 lakh rupees | 15 per cent |
| 12-15 lakh rupees | 20 per cent |
| Above 15 lakh rupees | 30 per cent |
According to the finance minister, a salaried worker under the new tax system could save up to Rs 17,500 in income tax as a result of these modifications.
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