The budget for 2024 releases a new tax regime. There are some changes in the tax slabs and brackets leading to relaxation for some taxpayers. The high-income group also has some benefits that we will discuss below with an example. Finance Minister Nirmala Sitharaman presented these new tax slabs and some changes in the tax regime pointing out its benefits for income taxpayers. Following is a detailed comparison between the old and VS new income regime.
What Are The Changes In the New Income Tax Regime?
There are some new changes in the income tax regime. The slabs are broader now covering more people in one slab. Following is a structured tax slab according to the new regime:
| Income Slab (New) | Proposed Tax Structure (New) | Income Slab (Old) | Current Tax Structure (Old) |
| Up to Rs. 3,00,000 | NIL | Up to Rs. 3,00,000 | NIL |
| Rs. 3,00,001 to Rs. 7,00,000 | 5% of the amount exceeding Rs. 3,00,000 | Rs. 3,00,001 to Rs. 6,00,000 | 5% of the amount exceeding Rs. 3,00,000 |
| Rs. 7,00,001 to Rs. 10,00,000 | Rs. 20,000 to 10% of the amount exceeding Rs. 7,00,000 | Rs. 6,00,001 to Rs. 9,00,000 | Rs. 15,000 + 10% of the amount exceeding Rs. 6,00,000 |
| Rs. 10,00,001 to Rs. 12,00,000 | Rs. 50,000 + 15% of the amount exceeding Rs. 10,00,000 | Rs. 9,00,001 to Rs. 12,00,000 | Rs. 45,000 + 15% of the amount exceeding Rs. 9,00,000 |
| Rs. 12,00,001 to Rs. 15,00,000 | Rs. 80,000+ 20% of the amount exceeding Rs. 12,00,000 | Rs. 12,00,001 to Rs. 15,00,000 | Rs. 90,000 + 20% of the amount exceeding Rs. 12,00,000 |
| Above Rs. 15,00,000 | Rs. 1,40,000 + 30% of the amount exceeding Rs. 15,00,000 | Above Rs. 15,00,000 | Rs. 1,50,000 + 30% of the amount exceeding Rs. 15,00,000 |
The new tax regime is said to be beneficial for those earning high and those in the middle class. The class of people earning annually below Rs. 3,00,000 will remain tax-free. Those earning Rs. 7,00,000 will now have to pay 5% rather than 10% on the income exceeding 3,00,000. Similarly, the percentage reduced for those earnings to around 10,00,000. They have to now pay 10% rather than 15% of the exceeding income.
The high-income people also have benefits in terms of tax relaxation where they can save between Rs. 10,000 to Rs. 17,000. For example, someone has an income of Rs. 14,00,000 per annum. He has to now pay Rs. 90,000+ 20% of the amount exceeding Rs. 12,00,000. Thus, they will pay Rs. 90,000 + 40,000= Rs. 1,30,000. However, in the new scheme, they have to pay Rs. 80,000 + 20% of the amount exceeding Rs. 12,00,000. Thus, they will pay Rs. 80,000 + 40,000 = Rs. 1,20,000. They saved Rs. 10,000 on their taxes.
Finance Minister Nirmala Sitharaman has introduced a lot of new schemes for the benefit of women, MSMEs, and the middle and lower class. Everyone is happy with the budget. However, many are still against the new budget. According to them, the current budget doesn’t have the potential to take the country towards a developed economy.