With Budget 2025 just around the corner, taxpayers eagerly anticipate what’s in store for their financial planning. The previous budget presented in July 2024, the first of the Modi 3.0 regime, introduced some changes under the new tax regime, from revised tax slabs to increased standard deduction. This year again, expectations are high for more taxpayer-friendly reforms, including potential tweaks in income tax slabs, capital gains tax, and benefits for salaried individuals.
Some key changes were announced for taxpayers under the new tax regime in the last budget. One of the key changes was tax slab tweaking, as the new tax rules applicable from April 1, 2024 aim to make the tax system simple and transparent, as the government claims. Also, by making the new tax system more attractive, the tax department is encouraging more and more taxpayers to adopt it.
Taxpayers, like in previous years, wonder if the government will address their concerns and ease their tax burden in the upcoming budget for FY2025-26. However, in this story, we will not focus on taxpayer expectations but rather look at the 5 major changes announced in the previous Budget 2024-25. As the last budget happened in July-end and the next one taking place on February 1, taxpayers may see some major changes getting effected at just a 6-month interval.
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5 major changes announced in Budget 2024-25
- New tax slabs
The tax slabs have been changed in the new tax system so that taxpayers can get more relief.
Rs 0-3 lakh: 0% tax
Rs 3-6 lakh: 5%
Rs 6-9 lakh: 10%
Rs 9-12 lakh: 15%
Rs 12-15 lakh: 20%
Rs 15 lakh and above: 30%
These new slabs can help middle-income taxpayers save up to Rs 17,500.
- Increase in Standard Deduction
The limit of standard deduction has been increased from Rs 50,000 to Rs 75,000.
The limit for family pensioners has also been increased from Rs 15,000 to Rs 25,000.
This will provide relief to salaried and retired taxpayers.
- Additional deduction on contribution to NPS
The deduction limit on an employer’s contribution to the National Pension System (NPS) has been increased from 10% to 14%.
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