Finance Minister Nirmala Sitharaman will current the first Budget 2024 of the Modi 3.0 authorities on July 23, 2024. Expectations are excessive that extra adjustments could also be introduced in the new earnings tax regime – presumably elevating the primary exemption restrict, mountaineering commonplace deduction, or/and rationalising the earnings tax slabs and tax rates additional.
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So what can salaried taxpayers anticipate from Budget 2024 for the new earnings tax regime? Times of India Online did an unique survey of prime private tax specialists. Here’s what they needed to say:
What Should Be The Ideal Tax Slabs, Rates Under New Income Tax Regime?
Tax specialists are divided on the ideal tax earnings tax slabs and earnings tax rates underneath the new tax regime. However, most agree that the 30% tax slab above an earnings of Rs 15 lakh remains to be steep and must be applied at incomes of not less than above Rs 20 lakh.
Aarti Raote, Partner, Deloitte India says that the authorities might not take a look at rejigging the tax rates as much as 25% slab underneath the new tax regime. Rather, the authorities might look to extend the threshold of Rs 15 lakh to Rs 20 lakh for the 30% tax price underneath the new tax regime.
“In addition, the basic exemption limit of Rs 3 lakh can be moved to Rs 5 lakh. Additionally, increasing the standard deduction to Rs 1 lakh from existing levels of Rs 50,000 would provide further relief and encourage compliance,” she tells TOI.
Chander Talreja, Partner, Vialto Partners tells TOI, “This year, the government may provide relief to middle income level individuals by tweaking the slab rates further and introducing additional slabs for income ranging between Rs 15 lakh and Rs 20 lakh.” Chander recommends the following earnings tax slabs and rates for salaried taxpayers underneath the new earnings tax regime:
Preeti Sharma, Partner, Tax & Regulatory Services, BDO India LLP says that the relevant tax price of 30% on the earnings of Rs 15 lakh is a really steep improve from 5% at the earnings degree of Rs 3 lakh. “The applicable tax rate on income of Rs 15 lakh should be reduced to 22-25% and another slab may be introduced raising the tax rate to maximum 30% for income level of Rs 25 lakh and above,” Preeti tells TOI.
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“This reduction in tax will leave the government with some loss in the collection of direct tax revenue, at the same time leaving the individuals with more disposable income in their hands. This would also lead to more spending in the economy which will bring more indirect tax collection for the government,” she provides.
However, Surabhi Marwah, Tax Partner, EY India is of the view that the present slabs are high quality however the primary exemption ought to be raised to Rs 5 lakh. She additionally advocates lowering the earnings tax rates with the intention to present extra disposable earnings in the arms of taxpayers.
Kuldip Kumar, Partner at Mainstay Tax Advisors says that the variety of slabs ought to be introduced down underneath the new regime. “Currently there are 7 tax slabs under the new regime. These need to be rationalized to 3 or 4 at the most. The government has all the data on income brackets and the respective number of taxpayers falling therein and taxes paid. Changes should be made in such a way that tax burden reduces on the lower and middle income group tax payers,” he tells TOI.
New Income Tax Regime: What Are the Current Income Tax Slabs?
There have been vital adjustments launched in private tax for people opting for new private tax regime in the Budget 2023 like surcharge price was introduced down from 37% to 25% for people having taxable earnings greater than Rs 5 crores, elevating of the primary exemption restrict by Rs 50,000, 100% tax rebate on earnings as much as Rs 7 lakh. Accordingly, the authorities offered advantages for low-income degree in addition to excessive earnings degree people.
Currently, the earnings tax rates and slabs for the new earnings tax regime are:
The eligibility restrict for rebate is Rs 7 lakh, which suggests a tax rebate of as much as Rs 25,000. There is a marginal reduction for people whose internet taxable earnings exceeds Rs 7 lakh and the incremental earnings tax legal responsibility is larger than incremental earnings above Rs 7 lakh.
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A surcharge is levied on the earnings tax if complete earnings exceeds Rs 50 lakh. The rates of surcharge are:
