Finance Minister Nirmala Sitharaman in her seventh Budget speech on July 23 revised the tax slabs under the new regime. She told the House that as a result of these changes, a salaried employee would be able to save up to ₹17,500 in income taxes.

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Union Finance Minister Nirmala Sitharaman presents the Union Budget 2024-25 in Lok Sabha, in New Delhi on July 23, 2024. | Photo Credit: PTI

Whilst the rate of taxation remains unchanged, the size of each of the slabs, excluding the initial zero to ₹3 lakh, remains unchanged. The erstwhile slab of ₹3 lakh to ₹6 lakh would now be expanded to ₹3 lakh to ₹7 lakh. However, the rate of taxation, that is 5%, remains unchanged. Similarly, the other slabs, that is, ₹6 to 9 lakhs, ₹9 to 12 lakhs, ₹12-15 lakhs and thereby beyond, would be revised to ₹7-10 lakhs, ₹10-12 lakhs, ₹12-15 lakhs and thereby beyond.  

Earlier, the Finance Minister further placed increasing the standard deduction for salaried employees from current ₹50,000 to ₹75,000 under the new tax regime.

Ms. Sitharaman further announced deduction in family pension for pensioners to be enhanced from ₹15,000 at present to ₹25,000. She held the measure would provide relief to about 4 crore salaried and pensioner individuals.

Concluding her speech, the Finance Minister told the house that because of the taxation measures announced on Monday, ₹37,000 crore would be foregone, which entails ₹29,000 in direct taxes and ₹8,000 in direct taxes. However, with a realisation of ₹30,000 crore expected, the total foregone amount would stand at ₹7,000 crore.