Union Finance Minister Nirmala Sitharaman unveiled the latest budget for this financial year at 11 am today, introducing alterations to income tax rates exclusively in the new tax regimes, leaving the old regime unaffected in the current Union budget. The modifications relate to tax deducted at source, affecting the new tax regime detailed in Section 115 ABC of the Income Tax Act of 1961, incorporating five tax slabs. Notably, the 5% tax on income from 3 to 6 lakh rupees now applies to earnings from 3 to 7 lakh rupees, increasing the upper limit by Rs. 1 lakh.
Here is an overview of the new tax slabs:
Up to Rs. 3,00,000: Nil
> Rs. 3,00,000 to Rs. 7,00,000: 5%
> Rs. 7,00,000 to Rs. 10,00,000: 10%
> Rs. 10,00,000 to Rs. 12,00,000: 15%
> Rs. 12,00,000 to Rs. 15,00,000: 20%
> Rs. 15,00,000: 30%
Additionally, standard deductions for salaried individuals have been raised from Rs. 50,000 to Rs. 75,000 under the new tax regime, along with amendments to Tax Deducted at Source (TDS) rates. The budget has also lowered TDS rates to benefit taxpayers in the long term. Notably, the TDS rate for life insurance policy payments under Section 194 DA has decreased from 5% to 2%, and several other sections have witnessed revisions, aiming to streamline tax deductions while ensuring revenue for the government without overburdening taxpayers.
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