Budget 2024- Finance Minister Nirmala Sitharaman is ready to announce her full budget for the financial year 2024-25. In this Budget 2024, the Finance Ministry is considering high standard deduction under the new tax system. Read full news…
India is set to announce its full budget for the financial year 2024-25. People from different sectors are eagerly waiting for the government’s fiscal roadmap. This year’s budget is particularly important as the country is grappling with economic recovery after the pandemic. It aims to maintain growth by stabilizing inflation, and strives for equitable development. According to media reports, the Finance Ministry is considering the possibility of increasing the standard deduction limit for income tax payers under the new tax system.
What is standard deduction?
Standard deduction refers to a specific portion of your total income that is not taxable. It is a broad estimate of all tax deductions that can be claimed by a salaried employee. All people with taxable salaries are eligible for standard deduction. It is aimed at relieving employers from the efforts involved in collecting bills from employees to claim tax exemptions. However, according to reports, the government is retaining the old system with exemptions.
Existing Standard Deduction
In the Budget 2023, Finance Minister Nirmala Sitharaman introduced a standard deduction of Rs 50,000 for salaried taxpayers and pensioners under the new tax regime, which became the default option unless you opted out.
Currently, individuals with taxable income of more than Rs 3 lakh have to pay 5 per cent income tax.
The report says that higher standard deduction will benefit all salaried taxpayers, including the upper class. However, this will lead to some revenue loss for the government.
