Zero Tax on Income up to Rs 300,000: Major Relief for Salaried Class in India’s 2024 Budget

In a significant development for India’s salaried class, Finance Minister Nirmala Sitharaman has unveiled the 2024 Budget, bringing welcome relief through increased tax exemptions and a higher standard deduction. This budget, presented as the first by Prime Minister Modi’s new government, aims to address long-standing demands for a revised tax structure.

Key Budget Highlights:

1. Zero Tax Up to Rs 300,000:
   Under the new tax regime, individuals with an annual income of up to Rs 300,000 will not be subject to any tax. This substantial change set to benefit approximately 40 million taxpayers.
2. Revised Tax Slabs:

• 5% tax on income between Rs 300,000 and Rs 700,000.
• 10% tax on income between Rs 700,000 and Rs 1,000,000.
• 15% tax on income between Rs 1,000,000 and Rs 1,200,000.
• 20% tax on income between Rs 1,200,000 and Rs 1,500,000.
• 30% tax on income exceeding Rs 1,500,000.

1. Increased Standard Deduction:
   The standard deduction has raised from Rs 50,000 to Rs 75,000, providing further relief to taxpayers.
2. Enhanced Contributions to National Pension Scheme:
   Employer contributions to the National Pension Scheme have increased from 10% to 14%, bolstering retirement savings.
3. Higher Tax Deduction on Family Pensions:
   The tax deduction for family pensions has proposed to rise from Rs 15,000 to Rs 25,000.

Additional Budget Announcements:

• Reduced Prices: Mobile phones, cancer medicines, lithium-ion batteries, and imported jewelry will see reduced prices due to lowered customs duties.
• Customs Duties: Duties on goods used for manufacturing solar cells, gold, and silver have reduced to 6%. Conversely, customs duties on ammonium nitrate and PVC imports will face increases.
• Boosting Exports: Reduced customs duties on leather textiles, electronic goods, and oxygen-free copper are aimed at enhancing exports.

Finance Minister Sitharaman acknowledged that despite these tax relief measures, the government anticipates a revenue loss of Rs 37,000 crore. Nevertheless, the budget seeks to create a more favorable financial environment for the working and middle class, reflecting the government’s commitment to economic reforms.