Union Budget 2024 Expectations: Rebate under new income-tax regime may be increased to Rs 7.5 lakh

10 Jan 2024 , 11:30 AM

The Centre may increase the tax rebate under the new income tax system to Rs 7.5 lakh in the interim budget, which is likely to be released on February 1, according to a report, citing sources familiar with the negotiations.

This implies that an individual earning Rs 7.5 lakh, benefiting from a standard deduction of Rs 50,000, will be exempt from paying income tax starting from the fiscal year 2024-25. According to the report, Finance Minister Nirmala Sitharaman is likely to introduce a Finance Bill to implement these adjustments.

In the 2023 Budget, the government increased the rebate under the new income tax regime to Rs 7 lakh, up from the previous Rs 5 lakh. The basic exemption limit was also raised to Rs 3 lakh, compared to the earlier limit of Rs 2.5 lakh. Additionally, a new deduction of Rs 15,000 was introduced for family pension.

The income tax slabs were decreased from seven to six in an effort to simplify the personal income tax regulations.

The government has been emphasizing the augmentation of tax revenues while concurrently reducing the tax load. During the April-November period of the previous year, tax revenue exhibited a growth of 14.7%, surpassing the budgeted projections of 10.5% for direct taxes and 10.45% for indirect taxes.

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