Budget 2024 Live Updates: Income Tax Slabs, Key Highlights & More

Income Tax Slabs 2023-24 and 2024-25 (Old vs New Tax Regime)

Finance Minister Nirmala Sitharaman unveiled significant changes to the new income tax regime in her Budget 2024 speech.

Tax Slab for FY 2023	Tax Rate	Tax Slab for FY 2024	Tax Rate
Upto ₹ 3 lakh	Nil	Upto ₹ 3 lakh	Nil
₹ 3 lakh – ₹ 6 lakh	5%	₹ 3 lakh – ₹ 7 lakh	5%
₹ 6 lakh – ₹ 9 lakh	10%	₹ 7 lakh – ₹ 10 lakh	10%
₹ 9 lakh – ₹ 12 lakh	15%	₹ 10 lakh – ₹ 12 lakh	15%
₹ 12 lakh – ₹ 15 lakh	20%	₹ 12 lakh – ₹ 15 lakh	20%
More than 15 lakh	30%	More than 15 lakh	30%

Notably, the government has retained the Income Tax Slabs for FY 2023-24, aiming to encourage taxpayers to adopt the new regime. These updates are designed to simplify and streamline the tax system, providing relief to taxpayers.

Income Tax Slabs in the New Tax Regime in Budget 2024

The Finance Minister, Ms. Nirmala Sitharaman, announced significant changes to the new income tax regime in the Union Budget 2024. The revisions aim to provide tax relief to individuals and simplify the tax structure.

The fiscal year 2024-25 income tax slabs have been revised. The 5% tax rate threshold has been raised from Rs 5 lakh to Rs 7 lakh, benefiting more individuals with lower tax rates.

Standard Deduction

Standard deduction for salaried employees increased from 50,000/- to ₹75,000/-
Deduction on family pension for pensioners increased from 15,000/- to ₹ 25,000/-

These changes are expected to provide tax relief to approximately 40 million salaried employees and pensioners, further simplifying the tax structure and reducing financial burdens.

Main Features of the 2024 New Tax Regime

The new tax regime is the default system for calculating an individual’s tax liability. This means taxes are computed based on the new regime unless the taxpayer opts for the old regime, which offers more deductions and exemptions.

To continue with the old regime, one must specifically choose it. The new regime provides a simplified structure with fewer deductions but includes several key features for taxpayers who adhere to it:

• Five income tax slabs: There are five different tax slabs, with the highest tax rate of 30% for income exceeding Rs. 15 lakh, and additional slabs for lower income ranges.
• Basic exemption limit: No tax is payable on income up to Rs. 3 lakh.
• Tax rebate: For incomes up to Rs. 7 lakh, no tax is payable due to a rebate of up to Rs. 25,000 under Section 87A of the Income-tax Act, 1961.
• Marginal tax relief: Small taxpayers with incomes slightly over Rs. 7 lahks receive marginal tax relief to minimize the tax burden.
• Surcharge on high incomes: A 25% surcharge applies to incomes above Rs. 5 crore.

Standard Deduction

• Salaried individuals can claim a standard deduction of Rs. 75,000 in the new tax regime (Rs. 50,000 in the old regime).
• Family pensioners are eligible for a standard deduction of Rs. 25,000, offering additional tax relief.

Understanding India Budget Formation: A Five-Step Guide

Step 1: Pre-Budget Preparations

• The budget preparation process commences with the Ministry of Finance issuing circulars to all ministries and departments, soliciting their budget proposals.
• The ministries and departments subsequently submit their proposals, which include detailed estimates of revenue and expenditure.

Step 2: Budget Estimates and Allocation

• The Ministry of Finance reviews and consolidates the proposals, allocating resources based on priorities and availability.
• The Finance Minister subsequently holds consultations with various stakeholders, including ministries, departments, and state governments.

Step 3: Budget Drafting and Approval

• The budget is drafted and approved by the Finance Minister. The approved budget is then submitted to the Cabinet for further approval.

Step 4: Budget Presentation and Debate

• The Finance Minister presents the budget in Parliament, typically on the last working day of February.
• The budget is subsequently debated, and members of Parliament may propose amendments or modifications.

Step 5: Budget Passage and Implementation

• The budget is voted on and passed by Parliament, and once approved, it is formally implemented.
• The government then commences executing its plans and programs.

Importance of Budget to the Indian Economy

The budget plays a pivotal role in the Indian economy, serving as a potent instrument for resource allocation, economic growth, and fiscal discipline. By prioritizing sectors and programs, the budget ensures optimal resource utilization, thereby driving growth and development. A well-crafted budget has a profound impact on the economy, influencing inflation control, social welfare, and investor confidence.

The Role of Utility Allocation in Nation-Building

Budget Ensures Economic Stability for the Future

Budgeting for Debt Control and Deficit Reduction

Public Investment: A Key Driver of Economic Growth

Maintaining Price Stability Through Quality Control Checks on Commodities

Key Takeaways from Union Budget 2024-25

In her Union Budget 2024 speech, Finance Minister Nirmala Sitharaman announced several landmark projects focused on agriculture, manufacturing, and the services sector. She also introduced substantial reforms to both the capital gains tax and income tax systems. Sitharaman underscored the government’s commitment to driving the country towards robust development and inclusive prosperity. She noted that the interim budget had pledged a clear roadmap for achieving a ‘Viksit Bharat’ (Developed India), and this budget delivers on that promise.

Furthermore, Sitharaman unveiled comprehensive plans for Bihar and Andhra Pradesh, featuring increased investments in infrastructure and targeted financial support. These initiatives aim to enhance human resource development, upgrade infrastructure, and generate economic opportunities. The ultimate goal is to transform the eastern region of India—encompassing Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh—into a pivotal driver of progress towards a developed India. The Budget 2024 also incorporates various measures aimed at augmenting education and job creation.

TAXATION

The Union Budget 2024 has increased the long-term capital gains tax (LTCG) on both financial and non-financial assets from the current 10% to 12.5%. Additionally, the short-term capital gains tax (STCG) on certain assets has been raised to 20%.

• Long-Term Capital Gains (LTCG) Tax:

The tax on long-term capital gains (LTCG) from assets held for over two years has been increased from 10% to 12.5%.

For listed financial assets, the qualifying holding period for LTCG remains at more than one year.

Unlisted financial assets and all non-financial assets must be held for a minimum of two years to be classified as long-term.

Additionally, unlisted bonds and debentures, debt mutual funds, and market-linked debentures will be subject to capital gains tax at applicable rates.

• Short-Term Capital Gains (STCG) Tax:

If you sell a financial asset within one year of purchase, it is considered a short-term gain.

The tax rate on short-term capital gains is 20%. Effective now, short-term gains on specified financial assets will be subject to this tax rate.

• Exemption Limit:

The exemption limit for capital gains on specific financial assets has been increased to Rs 1.25 lakh per year.

CHANGES IN TDS RATES

• TDS Credit for Salaried Employees:

Salaried employees are now eligible to claim credit for Tax Collected at Source (TCS) against Tax Deducted at Source (TDS) on their salaries. Previously, TCS could only be claimed as a refund upon filing income tax returns, resulting in idle funds. This amendment will take effect from October 1, 2024, and will benefit taxpayers from the financial year 2024-25 onwards.

• TDS on Rent Payments:

The Tax Deducted at Source (TDS) rate on rent payments has been reduced. Currently, individuals or Hindu Undivided Families (HUFs) paying over ₹50,000 in rent per month are required to deduct 5% as TDS. The Finance Bill, 2024 proposes reducing this rate to 2%, effective from October 1, 2024. This reduction will alleviate the financial burden on tenants, particularly in areas with high rental rates.

• TCS Credits for Minors:

Parents are now permitted to adjust Tax Collected at Source (TCS) credits against their tax liability when the minor’s income is clubbed with theirs. Previously, these credits could only be claimed by the minor themselves. However, further clarification is awaited from the Central Board of Direct Taxes (CBDT). This provision will take effect from January 1, 2025.

• TDS Section Impacting Partnership Firms:

A new Tax Deducted at Source (TDS) provision affects partnership firms. Currently, there is no TDS on payments made to partners, including salary, remuneration, interest, bonus, or commission.

ABOLISHMENT OF ANGEL TAX

The provisions that impose angel tax will be repealed with effect from April 1, 2025, as per the Finance Bill. In a significant move, the government has abolished the Angel Tax in India, effective from the Union Budget 2024. Consequently, angel investors can now invest in startups without the concern of paying taxes on their investments.

This decision aims to:

• Boost investment in early-stage companies
• Support the growth of the startup ecosystem
• Facilitate easier access to funding for startups, unencumbered by taxation

With the abolishment of the Angel Tax, startups can now focus on growth and innovation, knowing that they can attract investments without the burden of additional taxes.

CUSTOMS DUTY

Gold and Silver Prices Set to Drop After Budget Announcement

In a move expected to make gold and silver more affordable, Finance Minister Nirmala Sitharaman has slashed customs duties on these precious metals from 15% to 6%. Customs duties on platinum have also been reduced to 6.4%.

This change aims to boost domestic production of gold and precious metal jewelry in India. By reducing import duties, the government hopes to stimulate demand and support local industries. 

However, there is a catch: increased gold demand from India could drive up global prices, which have already reached record highs this year. This could exacerbate India’s trade deficit and put additional pressure on the rupee, which is already under strain.

EMPLOYMENT AND SKILLING

Employment-Linked Incentive Schemes:

The government will implement three schemes for employment-linked incentives, with an allocation of ₹1.48 lakh crore. These schemes focus on recognizing first-time employees, supporting employers, and encouraging enrollment in the Employees’ Provident Fund Organization (EPFO).

Education and Skilling:

The budget allocates funds for education, employment, and skilling initiatives. Over the next five years, approximately 4.1 crore youth are expected to benefit from these initiatives.

Collaborative Skilling Program:

A new collaborative skilling program will be launched in partnership with state governments and industries to enhance skill development. These measures aim to create job opportunities, enhance skills, and strengthen India’s workforce.

PM PACKAGE OF 5 SCHEMES:

Scheme A: First-Time Employment Support

Scheme B: Job Creation In Manufacturing

Scheme C: Employer Support and Employment Generation

WOMEN EMPOWERMENT

In the Budget 2024, Finance Minister Nirmala Sitharaman allocated over ₹3 lakh crore for women’s initiatives, emphasizing gender equality and empowerment.

Here are the key highlights:

Women-Centric Schemes: The budget supports schemes benefiting women and girls, including hostels, creches, and skilling programs.

Female Workforce: India’s female labor force participation rate climbed to 24% in Q2FY24. The number of new female members rose by 12.1% in May 2024, with a 17.2% increase in net female additions.

Working Women Hostels and Creches: The government plans to facilitate higher participation of women in the workforce by setting up working women hostels in collaboration with industries and establishing creches. The budget’s focus on women’s empowerment aims to boost participation, diversity, and economic opportunities for women.

AGRICULTURE ADN RURAL DEVELOPMENT

In the Union Budget 2024, Finance Minister Nirmala Sitharaman proposed an allocation of ₹1.52 lakh crore for agriculture and allied sectors. Furthermore, she earmarked ₹2.66 lakh crore for rural development, including investments in rural infrastructure.

This budget prioritizes productivity, resilience in agriculture, and self-sufficiency in pulses and oilseeds. It aims to introduce new high-yielding and climate-resilient crop varieties and promote natural farming practices among farmers across the country.

MSMEs ( Ministry of Micro, Small & Medium Enterprises )

To boost Micro, Small, and Medium Enterprises (MSMEs), the government has introduced:

FINANCIAL INITIATIVES

Union Budget 2024: Boost for Education Sector

On July 23, Finance Minister Nirmala Sitharaman announced a significant allocation of Rs 1.20 lakh crore for education in the Union Budget 2024-25.

• E-voucher system for higher education loans up to Rs 10 lakh, benefiting 1 lakh students annually
• 03% interest subvention on loans for higher education in domestic institutions.
• Enhanced financial support for higher education loans.
• However, the budget also saw a substantial 60% cut in the University Grants Commission (UGC) budget, sparking concerns about the impact on higher education institutions.

India Budget 2024: Boost for Foreign Investment

Finance Minister Nirmala Sitharaman announced plans to simplify Foreign Direct Investment (FDI) regulations, aiming to attract more international investment. Industry experts have welcomed this move, citing benefits such as:

• Reduced corporate tax rates for foreign companies
• Streamlined FDI rules and regulations

Kartik Chhaya, COO of Rupeeseed, praised the forward-thinking approach, stating that these changes will:

• Enhance India’s appeal as a global tech hub
• Attract more foreign investment and boost economic growth

INFRA AND DEVELOPMENT

In the Union Budget 2024, there is a strong emphasis on infrastructure development in India. Here are some key points:

Allocation for Infrastructure:

The budget allocates ₹11.11 lakh crore (approximately $134 billion) for infrastructure development. This record-breaking capital expenditure (capex) aims to modernize India’s infrastructure through significant projects and allocations.

Focus Areas:

The budget prioritizes roads, railways, ports, and urban development, with investments expected to generate employment and improve overall productivity. Funding support is provided for critical nodes in industrial corridors, such as the Amritsar-Kolkata Industrial Corridor and the Vizag-Chennai Industrial Corridor.

The National Industrial Corridor Development Corporation (NICDC) will promote the development of 12 new industrial zones, focusing on inclusive growth in new regions of the country.

Innovation and Startups:

Increased funding for research and development (R&D), along with extended support to startups and MSMEs, will foster innovation in sectors such as steel manufacturing.

NUCLEAR AND SPACE

In the Union Budget 2024, India has prioritized both nuclear power and space research. Here are the key highlights:

Nuclear Energy:

The government has allocated ₹1 trillion for the development of nuclear energy, with a focus on encouraging private-sector investment. To this end, a venture capital fund of ₹10 billion will be established to support nuclear research and innovation. Plans also include collaborating with the private sector to establish Bharat Small Reactors, which will develop small modular reactors capable of producing low-carbon electricity.

Space Research:

India plans to increase its space program spending by five times over the next decade. To support private sector involvement in space research and innovation, a ₹10 billion venture capital fund has been established.

The Indian Space Promotion and Authorisation Centre (IN-SPACe) estimates that India’s space economy will reach $44 billion by 2033.

The budget places a strong emphasis on space technology and applications, with a significant increase in funding compared to the previous year (2023). These initiatives demonstrate India’s commitment to advancing nuclear energy and space exploration.

BUDGET ESTIMATES FOR FY 2025

The government has revised its fiscal deficit estimate to 4.9% of GDP, down from 5.1% in the interim Budget. The Finance Minister aims to further reduce the fiscal deficit to below 4.5% by 2025.

• Total receipts for the financial year 2025 are expected to be ₹ 32.07 lakh crore.
• Total expenditure for the financial year 2025 is expected to be ₹ 48.21 lakh crore.
• Market borrowing has been reduced by ₹ 1.42 lakh crore to ₹ 14.01 lakh crore for the financial year 2024.

Tax Slab for FY 2023	Tax Rate	Tax Slab for FY 2024	Tax Rate
Upto ₹ 3 lakh	Nil	Upto ₹ 3 lakh	Nil
₹ 3 lakh – ₹ 6 lakh	5%	₹ 3 lakh – ₹ 7 lakh	5%
₹ 6 lakh – ₹ 9 lakh	10%	₹ 7 lakh – ₹ 10 lakh	10%
₹ 9 lakh – ₹ 12 lakh	15%	₹ 10 lakh – ₹ 12 lakh	15%
₹ 12 lakh – ₹ 15 lakh	20%	₹ 12 lakh – ₹ 15 lakh	20%
More than 15 lakh	30%	More than 15 lakh	30%

Sector-wise allocation of Funds in India Budget 2024?

The next three ministries in the top five were:

• Ministry of Road Transport and Highways: ₹ 2.78 lakh crore
• Ministry of Railways: ₹ 2.55 lakh crore
• Ministry of Consumer Affairs and Public Distribution: ₹ 2.23 lakh crore

State-wise Allocations of Funds in India Budget 2024?

The Union Budget 2024 has allocated funds to various states, addressing their unique needs and promoting regional development. Key state-wise allocations include:

• Uttar Pradesh: Infrastructure development (roads, healthcare), agricultural support
• Maharashtra: Industrial infrastructure enhancement, public transportation upgrades (Mumbai)
• Karnataka: IT sector growth, education and healthcare improvements
• Tamil Nadu: Industrial growth, environmental conservation
• West Bengal: Agricultural development, rural infrastructure, urban services
• Gujarat: Industrial growth, infrastructure, renewable energy, water management
• Punjab: Agricultural modernization, irrigation, healthcare, rural development
• Rajasthan: Water management, agricultural support, tourism, rural employment
• Haryana: Urban development, transportation, agricultural and industrial support
• Odisha: Infrastructure improvement, industrial support, social welfare, disaster management, environmental protection.

These targeted allocations aim to ensure balanced growth and development across India, addressing specific state needs and priorities.

Top 5 Takeaways for Salaried Persons, Job Seekers

Finance Minister Nirmala Sitharaman announced several benefits for salaried employees and job seekers in the new income tax regime:

Tax Slab for FY 2024	Tax Rate
Upto ₹ 3 lakh	Nil
₹ 3 lakh – ₹ 7 lakh	5%
₹ 7 lakh – ₹ 10 lakh	10%
₹ 10 lakh – ₹ 12 lakh	15%
₹ 12 lakh – ₹ 15 lakh	20%
More than 15 lakh	30%

Increased Standard Deduction: Raised from ₹50,000 to ₹75,000, reducing taxable income and resulting in potential income tax savings of up to ₹17,500.

Enhanced Family Pension Deduction: Increased from ₹15,000 to ₹25,000, providing greater financial stability.

One-Month Wage for New Entrants: Eligible employees with a monthly salary of ₹1 lakh will receive a direct provident fund contribution, benefiting 210 lakh youth.

Internship Opportunities: A comprehensive scheme offering internships in 500 top companies to 1 crore youth over 5 years, promoting skill development and employment.

What Does the Union Budget Say About Personal Income Tax?

Key Updates:

Increased Standard Deduction:

• Salaried Employees and Pensioners: ₹75,000
• Family Pensioners: ₹25,000

New EPFO Linked Schemes:

• Scheme A: First-time employees earning up to ₹15,000
• Scheme B: Incentives for first-time employees and employers
• Scheme C: Employers reimbursed up to ₹3,000 per month

Enhanced NPS Benefits:

• Employer contribution increased from 10% to 14%

How to Download the Union Budget 2024 PDF?

Where can I download the Budget Speech and Finance Bill 2024-25 PDF?

Union Budget 2024-25: Download the complete Budget Speech and Finance Bill 2024-25, presented by Smt. Nirmala Sitharaman, Minister of Finance, Government of India.

Click on the link to download Finance Bill 2024: FINANCE BILL

Click on the link to download the Budget Speech 2024: BUDGET SPEECH

Summary

The Finance Minister shared the following financial plans for 2024-25:

• Income (excluding loans): ₹32.07 lakh crore
• Expenses: ₹48.21 lakh crore
• Tax collection: ₹25.83 lakh crore
• Deficit (shortfall): 4.9% of India’s GDP

The Minister also announced:

• Gross loans to be taken: ₹14.01 lakh crore
• Net loans to be taken: ₹11.63 lakh crore

The government’s financial plan, in place since 2021, has been successful and aims to reduce the deficit to below 4.5% next year.