Indian Finance Minister Nirmala Sitharaman presented a budget filled with good news for the working class, particularly in terms of taxes.
The Modi government’s first budget in its new term aims to address a long-standing demand for a revised tax structure. Here’s a breakdown of the key changes impacting taxpayers:
Tax Relief for Millions:
- Higher Standard Deduction: Budget 2024 increases the standard deduction, the amount automatically subtracted from your taxable income, from Rs 50,000 to Rs 75,000. This translates to direct savings for taxpayers.
- Revised Tax Slabs: The government has tweaked the tax slabs, the income brackets under which different tax rates apply. This means many people will pay less tax.
- Who Benefits? An estimated 40 million taxpayers are expected to benefit from these changes.
New Tax Rates:
The new tax regime offers a tiered tax structure:
- No tax on income up to Rs 3 lakh
- 5% tax on income between Rs 3 lakh and Rs 7 lakh
- 10% tax on income between Rs 7 lakh and Rs 10 lakh
- 15% tax on income between Rs 10 lakh and Rs 12 lakh
- 20% tax on income between Rs 12 lakh and Rs 15 lakh
- 30% tax on income above Rs 15 lakh
More Benefits for Taxpayers:
- Increased NPS Contribution: The budget proposes an increase in employer contributions to the National Pension Scheme (NPS) from 10% to 14% of your salary. This translates to a larger retirement corpus.
- Higher Tax Deduction on Family Pensions: Those receiving family pensions will get a tax break. The tax deduction on family pensions is proposed to be increased from Rs 15,000 to Rs 25,000.
Budget Bonanza Beyond Taxes:
The budget also brings relief for consumers by reducing prices on essential items:
- Mobile Phones: Get ready for potentially cheaper mobile phones!
- Cancer Medicines: The budget aims to make cancer treatment more affordable by reducing the prices of cancer medicines.
- Lithium-ion Batteries: These batteries, crucial for electronics and electric vehicles, are set to become cheaper.
- Imported Jewelry: Looking to buy some bling? Imported jewelry might see a price reduction.
Boosting Exports and Manufacturing:
The budget aims to incentivize exports and domestic manufacturing by reducing customs duties on:
- Solar Cells: Making solar power more affordable!
- Gold and Silver: Customs duty on these precious metals is reduced to 6%.
- Leather Textiles: A potential boost for the leather export industry.
- Electronic Goods: Domestic production of electronics might get a leg up.
- Oxygen-free Copper: This reduction can benefit various industries.
Industry-Specific Changes:
- Petrochemicals: Customs duty on ammonium nitrate will increase.
- Plastics: PVC imports will face a higher customs duty (increased from 10% to 25%).
Budget 2024 offers a sigh of relief for many Indian taxpayers and consumers. The tax revisions, increased deductions, and reduced prices on essential items are expected to have a positive impact on the economy.
