Relief for IT payers in the new tax regime

In a significant update to the income tax structure, Finance Minister Nirmala Sitharaman unveiled revised income tax slabs for the Assessment Year 2025-26 onwards during the Budget 2024-25 announcement. These new slabs aim to provide relief and simplicity to taxpayers across various income brackets.

Here are the revised income tax slabs under the new regime:

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

Under these new slabs, individuals earning up to Rs 3 lakhs annually will be exempt from paying income tax. For those earning between Rs 3 lakhs and Rs 7 lakhs, a tax rate of 5% will be applicable, gradually increasing as income rises.

The revised income tax slabs and increased standard deduction are projected to provide significant relief to salaried employees and other taxpayers. As per estimates, a typical salaried employee is expected to save approximately atleatRs 17,500 in income tax under the new regime.

Additionally, Finance Minister Sitharaman announced an increase in the standard deduction from Rs 50,000 to Rs 75,000, which will further benefit taxpayers across income groups.

In addition to these changes, the Finance Minister introduced CHANGES impacting capital gains and financial markets. Short-term capital gains tax has been increased to 20% from the previous 15%, while long-term capital gains tax has been adjusted to 12.5% from 10%. There is also a planned increase in Securities Transaction Tax (STT) on futures and options, alongside the introduction of taxation on income from buybacks.Addressing concerns over the complexity and litigation surrounding the Income Tax Act 1961, FM Sitharaman highlighted a comprehensive review aimed at reducing disputes. She emphasized that this review is expected to be concluded within six months, aiming to streamline tax procedures and enhance compliance.

These changes mark a significant step towards simplifying the tax regime while ensuring fairness and efficiency in the taxation system.

Stay tuned for more updates on the Budget 2024-25 and its implications.