Finance Minister Nirmala Sitharaman announced the union’s new budget 2024-2025 in parliament on July 23. The Budget focused on provisioning for the agriculture sector, the introduction of schemes related to employment, loan schemes, announcement for financial support to the MSME sector, infrastructural development & fiscal deficit projection at 4.9% with a commitment to reducing it down to 4.5%
Finance Minister Nirmala Sitharaman presented the union’s new budget 2024- 2025 during the budget session of parliament on Tuesday. Nirmala Sitharaman became the first finance minister to present seven consecutive budget speeches.
In the budget, Finance Minister ‘Nirmala Sitharaman’ announced an increase in the standard deduction for salaried employees from 50,000-75000 under the new income tax regime -an increase of 50%. In her budget speech, she also announced relaxation in the income tax slabs under the new tax regiment for the current financial year.
The New Income Tax slabs announced as follows:-
- Up to Rs 3 lakh : 0%
- Rs 3 lakh to Rs 7 lakh : 5%
- Rs 7 lakh to Rs 10 lakh : 10%
- Rs 10 lakh to Rs 12 lakh : 15%
- Rs 12 lakh to Rs 15 lakh :20%
- Above Rs 15 lakh : 30%
The Finance Minister announced that “As a result of these changes, a salaried employee in the new tax regime stands to sum up to Rs 17500 in income tax”
Increase in tax deduction on family pension:-
Sitharaman also announced a plan to increase the family pension deduction amount for the better financial stability of salaried individuals and pensioners. The deduction amount is proposed to be increased to 25000 from 15000, under the new tax regime.
The Finance Minister said while presenting the new Budget 2024 “One month’s wage to all persons newly entering the workplace in all formal sectors. Direct Benefit Transfer of one month’s salary in 3 installments to first-time employers as registered in the EPFO will be up to Rs 15000. The Eligibility limit will be a salary of Rs 1 lakh per month. The Scheme will benefit 210 lakh youth.
In Addition to the direct benefit transfer, the government also announced that incentives will be provided directly to both employees and employers based on their EPFO contribution in the first four years employers will be reimbursed up to Rs 3000 per month for two years to want their EPFO contribution for each additional employee.
Announcement regarding 'INTERNSHIP'
The Finance Minister also said in her new budget 2024 speech that the government would launch an internship scheme for youth in 500 top companies. The Scheme will cover 10 million young people over five years. Those entering will also receive an internship allowance of 5000 per month and a one-time assistance of 6000. Companies will be expected to bear the training cost and 10% of the internsip cost for their CSR fund, she said.
Budget 2024 has tried to provide some relief to the salaried taxpayers, especially those in the lower tax slabs, in the form of the increased standard deduction and some favorable tweaks in the tax slabs under the new tax regime. The proposal to increase deductions for family pensions under the new tax regime should also provide some relief to those in the golden years.
Other Direct Tax Updates
- Reopening of ITR—Only if the escaped income is Rs 50 lakh or more can an assessment be reopened beyond three years from the end of the assessment year, up to a maximum period of five years from the end of the assessment year. In the case of search cases, the time limit of 10 years is reduced to six years.
- Income Tax Appeals—To reduce the number of pending cases, the monetary limits for filing tax dispute appeals in tax tribunals, high courts, and supreme courts have been raised to Rs.60 Lakh, Rs.1 Crore, and Rs.2 Crore.
- Vivaad se Vishwas Scheme—This scheme has been reintroduced to facilitate the settlement of income tax disputes and eliminate litigation.
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