Budget 2024: Youth are eyeing everything from income tax to employment, what changes can the government make in the tax slabs?

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budget 2024: Finance Minister Nirmala Sitharaman will present the interim budget before the Lok Sabha elections tomorrow. Generally, no major tax changes are made in the interim budget. But then middle class families are expected to get some relief. It is understood that the government may make the tax slab a little more attractive. In the budget, the base tax line can be increased from Rs 3 lakh to Rs 5 lakh. This will provide great relief to the middle class. Whereas, under the changes made in 2023, in the new tax regime, people with income up to one year are given tax exemption. Along with this, they also get a standard deduction of Rs 50 thousand. This simply means that people with income up to Rs 7.50 lakh do not have to pay income tax. However, now people are demanding that the government should increase the standard deduction from Rs 50 thousand to Rs 1 lakh. With this, salaried income tax payers will be almost at par with other individual taxpayers earning from business or professionals.

Extension of Income Tax Section 80D and 80E

If the government wants, it can expand Section 80D of Income Tax. This section of income tax is related to deduction in respect of payment of premium related to medical and health insurance policies. However, this exemption can be availed only by people paying taxes in the old tax regime. Now it is understood that to make the new tax regime attractive, the government may include this exemption in it. Whereas, under Section 80E of Income Tax, there is exemption in premium payment of loan. This will give a boost to many schemes of the government like self-reliant scheme, Startup India scheme, skill development schemes etc. Along with this, young tax payers will also be attracted.

How is the tax slab now?

Tax slabs in the new tax system

• No tax on income up to Rs 3 lakh

• 5% tax on income up to Rs 3-6 lakh (tax exemption under section 87A)

• 10 percent tax on income of Rs 6-9 lakh

• 15 percent tax on income of Rs 9-12 lakh

• 20 percent tax on income of Rs 12-15 lakh

• 30 percent tax on income above Rs 15 lakh

Tax slab in old tax system

• Basic exemption Tax exemption on income up to Rs 2.5 lakh (standard deduction of Rs 50 thousand)

• 5 percent tax on income between Rs 2.5 to Rs 5 lakh

• 15 percent tax on income between Rs 5 lakh to Rs 7.5 lakh

• 20 percent tax on income of Rs 7.5 lakh to Rs 10 lakh

• 30 percent on income more than Rs 10 lakh

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