Finance Minister Nirmala Sitharaman on Tuesday made a slew of tax-related announcements as she presented the Union Budget 2024-25, bringing cheer for taxpayers under the new regime as well as start-ups.
Announcing increase in standard deduction in the new tax regime from Rs 50,000 to Rs 75,000, Sitharaman also announced revisions to tax slabs in the new regime. As a result, she said, salaried employees can save as much as Rs 17,500 in the new regime. However, there will be no change in the old tax slabs.
Here’s a list of all tax-related announcements by the FM:
INCOME TAX
• Standard deduction in the new tax regime will be increased from Rs 50,000 to Rs 75,000.
• New tax slabs are as follows: No tax up to Rs 3 lakh, Rs 3-7 lakh at 5 per cent, Rs 7-10 lakh at 10 per cent, Rs 10-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and above Rs 15 lakh at 30 per cent.
CAPITAL GAINS TAX
• Short-term gains on certain financial assets will be taxed at 20 per cent.
• Long-term gains (on all financial and non-financial assets) will attract tax of 12.5 per cent.
• Unlisted bonds, debentures, debt mutual funds, market-linked debentures to be taxed at slab rate.
ANGEL TAX ABOLISHED
• To give a fillip to the start-up ecosystem, the government announced the abolishment of angel tax for all classes of investors.
GOOD NEWS FOR COMPANIES
• Corporate tax rate on foreign companies reduced to 35 per cent from 40 per cent
TAX LAWS TO BE REVIEWED
• The Finance Minister announced a comprehensive review of the Income Tax Act of 1961, which will make it easier to read and understand, and reduce uncertainty and potential for litigation. She set aside a period of six months for this.
• As part of the change, Sitharaman said tax authorities can only re-open assessments within three years from end of assessment and if the escaped income is Rs 50 lakh and over. However, even in such cases, the time limit for search cases is to be reduced from 10 years to six before year of search.
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