Budget 2024 income tax slabs expectations
Budget 2024 income tax slabs: Finance Minister Nirmala Sitharaman will present Interim Budget 2024 on February 1, 2024 and like every year salaried taxpayers are hopeful of income tax relief. Will the income tax slabs for FY 2024-25 be changed? Will changes be introduced in the new income tax and old tax regimes? Last year’s Budget announced several changes to the income tax slabs under the new tax regime. Even as we wait for Union Budget 2024 income tax announcements, here is a look at how the income tax slabs under the old and the new tax regime compare:
Income Tax Slabs 2023-24 old regime:
Income Tax Slabs 2023-24 old regime: In the image above are the regular income tax rates under the old income tax regime that are applicable to individuals (residents below 60 years of age) for the tax year 2023-24. (Table source: EY)
Income Tax Slabs for senior citizens
Income Tax Slabs 2023-24 old regime: In case of resident individuals who are senior citizens (ie. Above 60 years of age), the basic exemption limit is Rs 300,000. Similarly, for super senior citizens (above 80 years of age), the basic exemption limit is Rs 500,000.
Income Tax Rebate
Income Tax Slabs 2023-24 old regime: Also, under the regular or old income tax regime, resident individual taxpayers whose total income does not exceed Rs 500,000, are eligible for a tax rebate of Rs 12,500 or actual tax payable, whichever is lower.
Income Tax Slabs 2023-24 new tax regime:
Income Tax Slabs 2023-24 new tax regime: In the image above are the income tax rates applicable under the new income tax regime or the concessional tax regime (CTR) for the financial year 2023-24. These tax rates under the new regime are applicable to all individuals irrespective of their age. FM Nirmala Sitharaman revised the tax slabs under the new tax regime in Budget 2023. (Table source: EY)
Income Tax Rebate: New regime
Income Tax Slabs 2023-24 new tax regime: Under the CTR, the eligibility of rebate was increased for income up to Rs 7,00,000 in last year’s Union Budget. This provided a tax relief of up to Rs 25,000, according to EY. Further, marginal relief was introduced for resident individuals whose net taxable income exceeds Rs 7 lakh and the incremental income tax liability is higher than incremental income above Rs 7 lakh.
Surcharge rates new vs old regime
Income Tax Slabs 2023-24 new tax regime: In addition to the taxes computed as per the slabs mentioned above, an additional surcharge will be levied on the income-tax of the individuals if their total income exceeds Rs 5,000,000. The rates of surcharge are as above. A health and education cess is levied at the rate of 4%, for all individuals on the income-tax and surcharge (if applicable). (Table source: EY)
Budget 2024 income tax expectations:
Budget 2024 income tax expectations: Tax experts believe that if not in the Interim Budget, then in the full year Budget presented by the new government later this year, some deductions and exemptions may be made available under the new income tax regime. Apart from a possible increase in the standard deduction, there is also an expectation that the 30% tax rate may be made applicable above Rs 20 lakh income instead of Rs 15 lakh.