Budget 2024: In the year 2020, the government had introduced a new tax slab, which was not liked by most of the income taxpayers. Then changes were made in the same last year. Earlier there were 6 tax slabs, which has been changed to 5.
New Tax Regime: Now only a few days are left for the presentation of the General Budget (Budget- 2024). Most of the employed people expect exemption in Income Tax from the government. However, this time the interim budget will be presented on February 1, so there is no possibility of much change. But Lok Sabha elections are also ahead, hence relief in income tax can be expected.
In fact, in last year’s budget, the central government had given big relief to the tax payers. It was announced that no tax would be paid on income up to Rs 7 lakh. Along with this, Finance Minister Nirmala Sitharaman had introduced a new income tax slab in Budget-2023. In this way, taxpayers now have two options – New Tax Slab and Old Tax Slab.
Let us tell you, in the year 2020, the government had introduced a new tax slab, which was not liked by most of the income taxpayers. Then changes were made in the same last year. Earlier there were 6 tax slabs, which has been changed to 5. Also announced that no tax will be paid on income of Rs 7 lakh. Under the new tax system, the basic exemption limit was also increased to Rs 3 lakh.
This new tax slab (New Tax Regime) introduced in Budget 2023-24 is-
0% on Rs 0 to Rs 3 lakh
5% on Rs 3 to 6 lakhs
10 percent on 6 to 9 lakhs
15 percent on 9 to 12 lakhs
20 percent on 12 to 15 lakhs
30 percent on more than Rs 15 lakh
Old Income Tax Slab (Old Tax Regime)
Upto Rs 2.5 lakh – 0%
2.5 lakh to 5 lakh – 5%
5 lakh to 10 lakh – 20%
Above Rs 10 lakh – 30%
Whereas in the old tax slab, no tax has to be paid on income up to Rs 5 lakh, under section 80C of the Income Tax Act, tax exemption is also available on investment of Rs 1.5 lakh. That means, in this tax slab, the taxpayer does not have to pay any tax on income up to Rs 6.50 lakh. According to the old tax slab, no tax has to be paid on income up to Rs 2.5 lakh. There is a tax of 5 percent on income between Rs 2.5 lakh to Rs 5 lakh, but the government gives a rebate of Rs 12,500 on it. The simple mathematics is that in the old tax slab, you do not have to pay tax on income up to Rs 5 lakh.
If we talk about income tax rules, then according to that, if your annual income is up to Rs 5 lakh, then your tax becomes Rs 12,500, but due to getting rebate under Section 87A, the claim for paying income tax in the Rs 5 lakh slab becomes zero.
It is worth noting that the government’s biggest income comes from taxes, but along with imposing taxes, the government also provides full facilities to the citizens to save their taxes by using legal methods. Under Section 80C of the Income Tax Act, you can save your tax by investing Rs 1.5 lakh. If you separately invest up to Rs 50,000 in the National Pension Scheme, then under Section 80CCD you get an additional exemption of Rs 50,000 in income tax. Apart from this, the benefit of standard deduction up to Rs 50 thousand has been given in both new and old tax regime.
