Finance Minister Nirmala Sitharaman has changed the income tax slab in Budget 2024. The Finance Minister has increased the limit of standard deduction from Rs 50 thousand to Rs 75 thousand. Apart from this, the government has announced new tax slabs under the new tax regime.
Now there will be no tax on income up to Rs 3 lakh. 5 percent income tax will have to be paid on taxable income between Rs 3 to 7 lakh. If the taxable income is Rs 7 to 10 lakh, income tax will be levied at the rate of 10 percent. Income tax will be levied at the rate of 15 percent on taxable income of Rs 10 to 12 lakh. 20 percent income tax will be levied on taxable income of Rs 12 to 15 lakh. Income tax will be levied at the rate of 30 percent on taxable income of more than Rs 15 lakh.
However, tax experts are calling this exemption in income tax as mere cum in the camel’s mouth. Tax expert Manoj Goyal said that these deductions are like cumin in the camel’s mouth. He said that if we look at its total impact, those whose income is not from salary but from other sources will get a benefit of Rs 10,000. Whereas employed people will save Rs 17,500 annually due to increase in standard deduction by Rs 25,000.
Earnings up to Rs 5 lakh should have been tax free
Manoj Goyal said that the expectations people were keeping in today’s inflation have not been fulfilled. He said that the first slab which is currently Rs 0-3 lakh should have been reduced to Rs 0-5 lakh and it should have been made tax free. The lower tax slab should also have been increased in the same proportion. In this sense, it tastes like cumin in the mouth of a camel.
Tax expert Manoj Goyal said that if the tax free income was increased from Rs 3 to Rs 5 lakh, then a person earning above Rs 15 lakh annually would have saved Rs 60 thousand.
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Tax increased on long term and short term capital gains
He said that the more important thing to understand is that on one hand he has given some relief by increasing the tax slab but has also taken away many concessions. Those who were investing in the stock market, if someone held the stock for one year and sold it, then he had to pay 10 percent long term capital gain. But now it has been increased to 12.5 percent. Whereas short term capital gain has been increased from 15 percent to 20 percent.
Manoj Goyal said that tax payers are not going to gain much from this. He said that this system will cost the government Rs 37,500 crore but the government will recover Rs 30,000 crore through this system.
According to tax experts, people’s inclination towards the new tax regime will increase. He said that the Finance Minister has already said that two-thirds of the people have shifted to the new tax regime. Manoj Goyal said that despite this change, the new tax regime is beneficial for those whose annual salary is above Rs 12 lakh. In the old regime, only those who claim deduction and whose salary is below Rs 10-12 lakh are benefited.