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Union Budget 2024: How Much Tax Will The Common Man Save Under The New Tax Slabs?
The revised deduction limit now stands at Rs 75,000, increased from the earlier limit of Rs 25,000. The FM said that this regime will help taxpayers save Rs 17,500 in income tax
![Union Budget 2024: How Much Tax Will The Common Man Save Under The New Tax Slabs? Union Budget 2024 How Much Tax Will The Common Man Save Under The New Tax Slabs New tax regime tax savings FM nirmala sitharaman Union Budget 2024: How Much Tax Will The Common Man Save Under The New Tax Slabs?](https://feeds.abplive.com/onecms/images/uploaded-images/2024/07/24/b2f80938dc94fa3d0215e9548074e72d1721814072069800_original.jpg?impolicy=abp_cdn&imwidth=1200&height=675)
Finance Minister Nirmala Sitharaman on Tuesday unveiled revised tax slabs for the new tax regime as part of Budget 2024. The Minister said that this decision is being implemented to simplify the taxation process. In addition to the changes in the slabs, the Budget also introduced a new threshold for standard deduction in the new regime.
The revised deduction limit now stands at Rs 75,000, increased from the earlier limit of Rs 25,000. The FM said that this regime will help taxpayers save Rs 17,500 in income tax.
As part of the new structure, the revised slabs are as follows.
Tax Percentage |
Revised New Tax Regime ('FY25) (Rs) |
New Tax Regime ('FY24) (Rs) |
Nil |
0-3 Lakh |
0-3 Lakh |
5 per cent |
3-7 Lakh |
3-6 Lakh |
10 per cent |
7-10 Lakh |
6-9 Lakh |
15 per cent |
10-12 Lakh |
9-12 Lakh |
20 per cent |
12-15 Lakh |
12-15 Lakh |
30 per cent |
Above 15 Lakh |
Above 15 Lakh |
Dr Pooja Kansra, Economist, Mittal School of Business LPU, explains that while the increase in standard deduction should help taxpayers, it comes with a trade-off as any deductions or exemptions claimed under Section 80C or other clauses are not applicable here.
However, for taxpayers with moderate income level, the new regime can result in reduced tax liabilities, leading to an increase in disposable income which can then be utilised towards savings, investments, and consumption.
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Income (Rs) | Tax To Be Paid In Current New Tax Regime (Rs) | Tax To Be Paid In Revised New Tax Regime (Rs) |
6 lakhs | - | - |
8 lakhs | 31,200.00 | - |
11 lakhs | 70,200.00 | 55,900.00 |
13 lakhs | 104,000.00 | 88,400.00 |
16 lakhs | 171,600.00 | 153,400.00 |
Dipesh Jain, Partner, Economic Laws Practice, explains that the base exemption limit of Rs 3 lakh remains unchanged, even as it was expected to be hiked marginally. "The 5 per cent tax slab is proposed to be expanded by Rs 1 lakh, i.e., Rs 3-7 lakh from the existing slab of Rs 3-6 lakh. The highest tax slab of 30 per cent continues to be status quo, i.e., more than Rs 15 lakh. Accordingly, there would be a marginal relief of Rs 17,500 for individual tax-payers opting for new regime. This would further enhance the attractiveness of the new tax regime as compared to the old tax regime, where there are no relaxations proposed."
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