The Hon. Finance Minister presented her first union budget of the newly formed Government amid the heightened expectations from various stakeholders, especially individuals and salaried employees.
The budget did have many changes and some of the key proposals from an individual tax perspective are discussed below:
1. Realignment of income slabs under the new tax regime
With the on-going focus of the government on the new tax regime, following changes in the slab rate has been proposed:
Existing tax rates (in INR) |
Proposed tax rates (In INR) | Rate of tax |
Up to 3,00,000 | Up to 3,00,000 | Nil |
3,00,001 to 6,00,000 | 3,00,001 to 7,00,000 | 5% |
6,00,001 to 9,00,000 | 7,00,001 to 10,00,000 | 10% |
9,00,001 to 12,00,000 | 10,00,001 to 12,00,000 | 15% |
12,00,001 to 15,00,000 | 12,00,001 to 15,00,000 | 20% |
Above 15,00,000 | Above 15,00,000 | 30% |
The proposed change will provide a tax benefit up to a maximum of INR 10,000 (excluding surcharge and education cess) to the taxpayers.
2. Increase in standard deduction
Currently the limit for standard deduction is INR 50,000 under both old and the new tax regime. An enhanced limit of INR 75,000 is proposed under the new tax regime only providing an additional tax benefit up to a maximum of INR 7,500 (excluding surcharge and education cess) to the taxpayers.
3. Deduction towards family pension
It has been proposed to increase the deduction available towards family pension from the existing limit of INR 15,000 to INR 25,000, thereby providing a maximum benefit of INR 3,000 (excluding surcharge and education cess) to the taxpayers.