Union Budget 2024-25: Who Benefits From The New Tax Regime?

New Delhi: Finance Minister Nirmala Sitharaman, in her 7th budget address on Tuesday, highlighted multiple schemes under the Prime Minister's package, aimed at boosting employment and skill development across the nation. The Union Budget 2024-25 had several highlights ranging from a reduced fiscal deficit target to a revised income tax structure, among other key points. 

The New Tax Regime

One of the major changes includes lowering the tax rate to 5% for yearly incomes between Rs 3 lakh and Rs 7 lakh, up from the previous cap of Rs 6 lakh. This adjustment will especially benefit those earning up to Rs 7 lakh per year. As per the proposal, a 5 per cent tax will be levied on income between Rs 3-7 lakh, 10 per cent between Rs 7-10 lakh, and 15 per cent for Rs 10-12 lakh. However, 20 per cent tax will continue to be levied on income between Rs 12-15 lakh and 30 per cent for income above Rs 15 lakh.

Under the existing new I-T regime, a 5 per cent tax is levied on income between Rs 3-6 lakh, and 10 per cent for income between Rs 6-9 lakh. Income between Rs 9-12 lakh and Rs 12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively. A 30 per cent income tax would be applicable on income above Rs 15 lakh.

The revised tax rates are designed to provide relief to the middle class and encourage higher disposable income. Here's a breakdown of the new tax slabs:

• Rs 0-3 lakh: Nil
• Rs 3-7 lakh: 5%
• Rs 7-10 lakh: 10%
• Rs 10-12 lakh: 15%
• Rs 12-15 lakh: 20%
• Above Rs 15 lakh: 30%

Some major changes has been brought in personal taxes to benefit the middle class and pensioners. Under the new tax regime, the personal income tax standard deduction has been increased from Rs 50,000 to Rs 75,000, and the deduction for family pensions has been raised from Rs 15,000 to Rs 25,000. These changes are expected to provide a marginal relief of Rs 17,500 for taxpayers. 

Additional Highlights from the Budget

Coalition Dharma: Bihar and Andhra Pradesh received special financial allocations in the budget to support regional development.

Internship Scheme: An ambitious internship program for 1 crore youths was announced, offering opportunities in 500 companies. Participants will gain valuable experience over 12 months with a stipend of Rs 5,000 per month, plus a one-time stipend of Rs 6,000 from the government.

Tourism Development: The budget also focuses on boosting tourism in East India. Key initiatives include developing Vishnupath Temple and Mahabodhi Temple corridors, and promoting Rajgir and Nalanda as tourism hubs. Odisha's scenic beauty, temples, craftsmanship, wildlife sanctuaries, and beaches will also be highlighted.

Major Takeaways

No More Angel Taxes: The abolition of the angel tax will benefit startups and investors.

Cheaper Goods: Gold, phones, and batteries are expected to become more affordable.

Tourism Boost: Increased efforts to promote tourism in East India.

Youth Employment: Enhanced employment and internship opportunities for young people.