In her Budget 2024 presentation, Union Finance Minister Nirmala Sitharaman stated that there will be no tax liability for taxpayers with income up to Rs 7 lakh under the new tax regime. This is a pre-election Budget, a vote on account, popularly termed an interim Budget.
Adhil Shetty, CEO, Bankbazaar.com called the no-change move substantive. "The recent tax slab update with new regime was substantive. Anyone earning Rs 7.5 lakh or less pays no tax. This covers most of the working population."
Shetty said people were still "sticking to the old regime because they have a home loan, tax-saving investments, health insurance for family, retirement savings".
"Their tax-saving measures keep them from moving to the new regime. Those tax slabs are unchanged for 11 years now. No changes were expected in the interim budget for them. But that group of captive tax-savers earning Rs 12 lakh or more will have a reason to think the Budget could have done more for them," he said.
The exemptions and deductions in the Old Regime are not available in the New one. If the taxable income (after all deductions) under the old regime is below Rs 5 lakh, then the individual doesn’t need to pay any tax. Under the New Regime, the entire income will be tax-free if the taxable income is under Rs 7 lakh.
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> For income up to Rs 3 lakh, there is no tax.
> For income of more than Rs 3 lakh up to Rs 6 lakh, it is 5 per cent.
> Over Rs 6 lakh up to Rs 9 lakh, it is 10 per cent.
> Over Rs 9 lakh to Rs 12 lakh, it is 15 per cent
> Over Rs.12 lakh to Rs.15 lakh, it is 20 per cent.