Income Tax Slab: We are telling you how much the taxpayers earning how much will benefit from the changes announced in the budget. In a chart, we have taken examples of five such taxpayers, who earn ₹7,75,000, ₹10,75,000, ₹12,75,000, ₹15,75,000 and ₹18,75,000 respectively every year.
Income Tax Slab: Finance Minister Nirmala Sitharaman has given relief to the middle class on the income tax front in the Union Budget 2024-25 as expected, which will be available to the tax payers under the new tax system announced in 2020.
What are the changes on the income tax front…?
Under the New Tax Regime of Income Tax, the Finance Minister has not only increased the standard deduction from ₹ 50,000 to ₹ 75,000, but has also made changes in the tax slabs. According to the new slabs, income from zero to ₹ 3 lakh will attract zero income tax as before. After the change in the next slab, now only 5 percent tax will be levied on income from ₹ 3 lakh to ₹ 7 lakh, whereas till now only 5 percent tax was levied on income up to ₹ 6 lakh. Now 10 percent tax will have to be paid on income from ₹ 7 lakh to ₹ 10 lakh, whereas till now this slab was applicable on income from ₹ 6 lakh to ₹ 9 lakh. Now 15 percent tax will be levied on income from ₹ 10 lakh to ₹ 12 lakh, whereas till now 15 percent tax was levied on income from ₹ 9 lakh to ₹ 12 lakh. In the remaining slabs, 20 percent tax will have to be paid on income from ₹ 12 lakh to ₹ 15 lakh as before, and 30 percent tax will have to be paid on income above ₹ 15 lakh as before.
Understand from the chart, who will benefit how much…
Now we are telling you how much the taxpayers earning how much will benefit from these changes. In the chart given below, we have taken examples of five such taxpayers, who earn ₹7,75,000, ₹10,75,000, ₹12,75,000, ₹15,75,000 and ₹18,75,000 every year respectively. Now see, how much will be their income tax liability based on the standard deduction and slabs and rates existing till now, and what will be the income tax liability based on the standard deduction and slabs and rates proposed during Budget 2024-25 on Tuesday. Finally, it is also told how much the person earning how much will benefit from the changes made in the budget.
A person earning ₹7,75,000 will get a benefit of ₹28,600
A person earning ₹7,75,000 every year, his taxable income, that is, after the standard deduction of ₹50,000 that has been available till now, remains ₹7,25,000, and on the basis of the current rules and tax rates, his income tax liability including health and education cess is ₹28,600. Whereas after the announcement of increase in standard deduction, the taxable income of this person will remain Rs 7,00,000, and due to the exemption available under section 87A, his tax liability will become zero, and in this way this person will get a benefit of ₹28,600.
A person whose income is ₹10,75,000 will also get the benefit
A person whose total income is ₹10,75,000, his taxable income till now is ₹10,25,000, and his income tax liability is ₹66,300. After the increase in standard deduction, the taxable income of this person will be ₹10,00,000, and based on the new slabs, the income tax liability will also be ₹52,000, so, he will get a net benefit of ₹14,300.
A person whose annual income is ₹12,75,000 will get a benefit of ₹15,600
The third person in the chart has a total income of ₹12,75,000. His taxable income till now was ₹12,25,000, and hence his income tax liability was ₹98,800. With the new rules, this person’s taxable income will be ₹12,00,000, and with the new rates his income tax liability will be ₹83,200, giving this person a benefit of ₹15,600.
The one who earns ₹15,75,000 will get a benefit of ₹18,200
The fourth person is earning ₹15,75,000 annually, and his taxable income till now is considered to be ₹15,25,000, due to which his income tax liability is ₹1,63,800. After the increase of ₹25,000 in Standard Deduction, his taxable income will be ₹15,00,000, and his income tax liability as per the new slabs will be ₹1,45,600, hence, he will get a benefit of ₹18,200.
A person earning ₹18,75,000 will also get a benefit of ₹18,200
A person earning ₹18,75,000 per year has a taxable income of ₹18,25,000 after the current standard deduction of ₹50,000, on which an income tax liability of ₹2,57,400 is created. After the increase in standard deduction, his taxable income will be Rs 18,00,000, on which an income tax liability of ₹2,39,200 will be created, and this person will also get a benefit of ₹18,200.
