Taxpayers, Salaried Class May Get Relief In Income Tax Under New Tax Regime In Budget 2024: Report

Taxpayers can get some good news soon as the BJP-led Modi government can announce some relaxation in income tax under the new income tax regime when it presents an interim Budget next year just ahead of the Lok Sabha elections 2024, according to a report by ET Now.

As per the report quoting sources the Ministry of Finance is discussing proposals to provide relaxations to the taxpayers to promote the new tax regime and make the taxation system easy. It is believed that the government wants to make the new income tax regime more attractive and is looking to make taxation exemption free and simple.

Sources said that discussions are in progress on raising the exemption limit under the new tax regime from Rs 3.5 lakh to Rs 4 lakh. However, discussions are still in the initial phase and a final call would be taken mostly around the Budget.

Union Finance Minister Nirmala Sitharaman is slated to present an interim budget on February 1, 2024.
At present, there are two different Income Tax regimes - the new regime and the old regime. Under these two regimes, taxpayers are allowed to avail of tax benefits. The government introduced the new tax regime in 2020. The FM Sitharaman announced a slew of changes to the new tax regime, including a reduction of a number of tax slabs in this year's Budget.

In the new tax regime, the FM increased the rebate limit to Rs 7 lakh. Thus, those falling in the new tax regime, with an annual income of up to Rs 7 lakh, are not required to pay any tax. The finance minister also revised the tax structure in the new regime by bringing down the number of tax slabs to five and raising the tax exemption limit to Rs 3 lakh.

Under the revamped tax regime, no tax is imposed on income up to Rs 3 lakh. Income between Rs 3-6 lakh is taxed at 5%; Rs 6-9 lakh at 10%, Rs 9-12 lakh at 15%, Rs 12-15 lakh at 20% and income of Rs 15 lakh and above is taxed at 30%.