New Delhi. In the first full budget of the third term of the Modi government, Finance Minister Nirmala Sitharaman has given some relief to the working class and the middle class. The Finance Minister has announced to increase the standard deduction in income tax. While reading the budget speech, Nirmala Sitharaman said that those who file returns in the new tax regime will get a discount of Rs 75000 annually in standard deduction. Earlier it was Rs 5000. Apart from this, the standard deduction exemption for family pensioners has been increased from Rs 15000 to Rs 25000. This benefit will also be available in the new tax regime.
#WATCH , #UnionBudget2024: FM Sitharaman says, “As a result of these changes, a salaried employee in the new tax regime stands to save up to Rs 17,500. Apart from these, I am also making some other changes. Revenue of about Rs 37,000 crore will be forgone while revenue of about… pic.twitter.com/YentzmJQx1
— ANI (@ANI) July 23, 2024
In the new tax regime, there will be no tax on income up to Rs 3 lakh. 5% income tax will be levied on income of 3 to 7 lakh. 10% income tax will be levied on 7 to 10 lakh. 15% income tax will be levied on income of 10 to 12 lakh. 20 lakh will have to be paid on income of 12 to 15 lakh and 30% income tax will have to be paid on income of more than 15 lakh annually. Apart from this, to simplify the income tax, a comprehensive review of the Income Tax Act 1961 in 6 months was also announced. Not paying TDS on time will no longer be considered a crime. The review of the Income Tax Act will reduce tax related disputes and litigation.
In the case of charity, there will be a single tax exemption system instead of different ones. TDS for various payments will be 2 percent instead of 5. 20 percent TDS will no longer be levied on re-purchase of UTI or mutual funds. Giving a big benefit to e-commerce operators, TDS on them has been reduced from 1 percent to 0.1 percent. However, Long Term Capital Gain Tax i.e. LTCG has been increased from 10 percent to 12.50 percent. Short Term Capital Gain Tax i.e. STCG on many assets has also been increased to 20 percent. Due to these two decisions, the stock market took a dive during the budget speech. This will cause a big loss to the investors.