Finance Minister Nirmala Sitharaman announced changes to the new income tax regime in her Union Budget 2024 speech. These changes included new income tax slabs for FY 2024-25 and a hike in the standard deduction. The standard deduction was hiked from Rs 50,000 to Rs 75,000. Also the tax slab limit for 5% tax rate was changed from Rs 5 lakh to Rs 7 lakh. The capital gains tax regime was completely revamped with tax rates being increased. On expected lined no changes were announced in the old income tax regime since the government wants to incentivize the new regime.
One common income tax expectation from Budget 2024 was that the 30% income tax rate be introduced for income and salary levels above Rs 20 lakh, instead of the current Rs 15 lakh to put more cash in the hands of the middle class. The basic exemption limit under the new tax regime was hiked to Rs 3 lakh last year. The rebate limit is Rs 7 lakh.
Changes in Section 80C, Section 80D, Section 80TTA for savings and investments, medical insurance and interest on bank deposits respectively were anticipated. Some benefits for the senior citizens, such as a higher basic exemption limit under the new tax regime were also expected, but did not happen.