A Reuters report quoting government sources showed the Indian government is considering cutting personal income tax for the middle class to boost consumption.
However, the sources said the discussions are ongoing and no concrete decisions have been taken yet.
The announcement will come in the budget on February 1.
Even if the government does decide to go ahead with tax cuts, it would be under the new regime introduced in 2020.
According to the discussions, individuals with earnings up to ₹1.5 million will not pay any tax.
Currently, for income between ₹300,000 and ₹1.5 million the tax rate is 5 to 20 &nbsp;per cent, while higher income is taxed at 30 &nbsp;per cent.
Under the new regime, though, there are no exemptions allowed, compared to the older regime, which allows exemptions on housing rentals, home loan interest and principal repayment, and insurance.
However, filing tax returns under the 2020 regime is less complicated.
<h2>Default and options</h2>
The new regime was the default tax structure, with Indians given a choice to opt for the old regime.
While some murmurs are floating the government will mandate the new regime, reports suggest India will continue with both regime options similar to the current fiscal year's choices.
Individuals have the option of choosing the old regime, although, they cannot alter their choice once the new regime is opted for.
<h2>New vs old regime</h2>
Individuals need to look at the tax burden based on both regime's based on their investment choices for the year and make choice.
Take a look at the tax rates under both regimes for comparison and making the choice.
<figure class="image"><img alt="Taxation regimes" src="https://img-cdn.thepublive.com/fit-in/1920x1080/filters:format(webp)/wion/media/media_files/2024/12/27/TTGSHhgt4mDpmcgUHpJ8.jpg" style="width: 1920px;">
<figcaption>Taxation regimes Photograph: (WION)</figcaption>
</figure>
<h2>Government's plan to stimulate growth</h2>
Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country&rsquo;s slowing economy.
The tax cuts would primarily impact city dwellers, who are facing high living costs, and could encourage more taxpaye₹to opt for the newer 2020 tax system.
The potential tax reductions could make the simplified 2020 system more attractive to taxpayers, as it removes many exemptions but offe₹lower rates.
India&rsquo;s central government sources quoted by Reute₹indicate that such tax reforms could encourage wider adoption of this system,
Especially in the face of rising food inflation and weaker consumer demand.
The government has not yet specified the exact revenue loss from any cuts, but the goal is to stimulate economic activity amid sluggish growth.
India&rsquo;s economy has faced a significant slowdown, with growth dropping to its slowest pace in seven quarters between July and September unexpectedly.
Despite this, the government is optimistic that rural demand will continue to show resilience, and urban demand is expected to pick up.
The country&rsquo;s growth forecast for the fiscal year 2024/25 stands at 6.5 percent, at the lower end of its projected range.
With challenges such as high inflation and global uncertainties, including a stronger US dollar, India&rsquo;s tax reforms could play a critical role in boosting domestic consumption and supporting the middle class, which remains politically vocal about high tax burdens.
<h2>Changes to tax structure this year</h2>
Modifications to the income tax system occurred midway through the year 2024.
The reason behind this is that the government announced the Union Budget 2024 in July, following the general elections that took place between April and June of that year.
The income tax law amendments that were revealed in July 2024 may have slipped the minds of many taxpayers due to the budget's mid-year presentation.
Beginning with the fiscal year 2024&ndash;25, the majority of the income tax adjustments that were announced in July 2024 go into effect.
When you file your income tax return (ITR) in July 2025, you'll be able to claim different tax deductions and exemptions because of these changes.
The government adjusted the income tax brackets under the new tax system.
<a href="https://www.wionews.com/india-news/major-relief-for-indian-middle-class-govt-considering-tax-cut-amid-rising-economic-challenges-reports-8569145">Major relief for Indian middle class? Govt mulls tax cuts amid economic challenges: Reports</a>
For the current fiscal year 2024&ndash;25, taxpayers will benefit from increased savings due to the reduced income tax brackets of the new tax system.
The government raised the standard deduction limit and modified the income tax brackets under the new tax system.
<h2>Standard deduction changes</h2>
The standard deduction for people filing under the new tax regime for FY 2024-25 is ₹75,000, an increase from ₹50,000 in the prior regime.
The revised tax structure raises the standard deduction for family pensioners from ₹15,000 to ₹25,000.
For the fiscal year 2024&ndash;25 (modified for 2025&ndash;26), the standard deduction limit stays constant for individuals opting to utilise the prior tax framework.
<a href="https://www.wionews.com/videos/india-considers-income-tax-cuts-to-boost-consumption">India considers income tax cuts to boost consumption</a>
The old tax system provided a standard deduction of ₹50,000 for salaried and pensioner individuals, and ₹15,000 for family pensioners.
Salary earners and retirees can reduce their tax liability via the new regime's increased standard deduction, which they can use to their advantage.
Salary, pension, or family pension recipients are eligible to take a standard deduction from their gross income before determining their tax liability.
Funds paid out by insurance firms cannot be claimed as a standard deduction.
<h2>National Pension Scheme changes</h2>
An individual can get a bigger break on their employer's National Pension System (NPS) contribution if they choose the new tax system in FY 2024-25.
Under the new system, worke₹can deduct their employers' NPS contributions up to 14 per cent of their base income.
Up to 10 per cent of a worker's base income can be deducted in the past.
To determine taxable income, this deduction is taken from gross income in accordance with Section 80CCD (2) of the Income Tax Act, 1961.&nbsp;
This deduction is the sole one available under the new tax system, aside from the standard deduction.
The previous tax system allowed for an additional deduction of ₹50,000 for NPS investments made under Section 80CCD (1b) and a Section 80C deduction of ₹1.5 lakh.
Under the older tax system, the maximum amount that an employer may deduct from their NPS contributions for tax reasons remained unchanged.
People who want to pay less tax under the new system will be able to do so thanks to a larger deduction offered under the new system compared to the previous one.
Keep in mind that you would be responsible for paying taxes on employer contributions to EPF, NPS, and Superannuation funds if their combined value exceeds ₹7.5 lakh in a given fiscal year.
Additionally, taxes will be withheld on both the interest and return that is generated on the excess contribution.
<h2>Tax on capital gains changes</h2>
In the fiscal year 2024&ndash;25, the government will enforce new laws on capital gains taxes. The objective of the amendments was to optimise the framework for taxing capital gains.
A 20 per cent tax will be imposed on all short-term capital gains derived from shares and equity-oriented mutual funds. This has been increased from 15 per cent to 20 per cent.
Income tax brackets applicable to earnings will be imposed on short-term capital gains derived from diverse assets, such as real estate, gold, and other non-financial holdings.
The taxation rate for long-term capital gains is 12.5 per cent, irrespective of the asset type. The long-term capital gains tax rates will now be standardised across all asset classes.
Long-term capital gains (LTCG) on investments in stocks and equity-oriented mutual funds are now exempt from taxes up to ₹1.25 lakh every fiscal year, an increase from the previous threshold of ₹1 lakh.
The income tax on long-term capital gains (LTCG) on the sale of residential property is no longer entirely indexable.
If an individual acquires a residence on or before July 22, 2024, and then divests it, they will incur taxation on long-term capital gains (LTCG) in two manners, as stipulated by the new regulations.
Two methodologies exist:
(a) LTCG tax with indexation, calculated at 20 per cent, and
(b) LTCG tax without indexation, calculated at 12.5 per cent. In the absence of indexation benefits, long-term capital gains (LTCG) on the sale of a house acquired on or after July 23, 2024, will be subject to a tax rate of 12.5 per cent.
Only residents and Hindu Undivided Families (HUFs) may elect the LTCG taxation option for homes acquired before July 23, 2024.
Other taxable entities, including non-residents, will be obligated to remit 12.5 per cent without indexation.
The revised capital gains tax framework simplifies the method by which individuals ascertain their taxable income from capital gains.
In the past, various capital assets were subject to separate regulations for determining capital gains tax.
<h2>Capital gains holding period changes</h2>
The government has modified the time period for capital assets to further categorise capital gains as long-term or short-term.
The new criteria stipulate two holding periods for capital assets to determine whether earnings are classified as short-term or long-term.
Profits from the sale of any listed investment held for twelve months are classified as long-term capital gains.
Conversely, for capital gains on non-listed assets to qualify as long-term, the holding period for these securities must be 24 months.
Adjusting the holding period will facilitate taxpayers in monitoring the duration for which they must retain specific assets prior to sale, ensuring that their capital gains qualify as long-term capital gains.

Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country’s slowing economy. 

A Reuters report quoting government sources showed the Indian government is considering cutting personal income tax for the middle class to boost consumption. However, the sources said the discussions are ongoing and no concrete decisions have been taken yet. The announcement will come in the budget on February 1. Even if the government does decide to go ahead with tax cuts, it would be under the new regime introduced in 2020. According to the discussions, individuals with earnings up to ₹1.5 million will not pay any tax. Currently, for income between ₹300,000 and ₹1.5 million the tax rate is 5 to 20 per cent, while higher income is taxed at 30 per cent. Under the new regime, though, there are no exemptions allowed, compared to the older regime, which allows exemptions on housing rentals, home loan interest and principal repayment, and insurance. However, filing tax returns under the 2020 regime is less complicated. Default and options The new regime was the default tax structure, with Indians given a choice to opt for the old regime. While some murmurs are floating the government will mandate the new regime, reports suggest India will continue with both regime options similar to the current fiscal year's choices. Individuals have the option of choosing the old regime, although, they cannot alter their choice once the new regime is opted for. New vs old regime Individuals need to look at the tax burden based on both regime's based on their investment choices for the year and make choice. Take a look at the tax rates under both regimes for comparison and making the choice. Taxation regimes Photograph: (WION) Government's plan to stimulate growth Sources reveal that this move aims to provide relief to the middle class and stimulate consumption in response to the country’s slowing economy. The tax cuts would primarily impact city dwellers, who are facing high living costs, and could encourage more taxpaye₹to opt for the newer 2020 tax system. The potential tax reductions could make the simplified 2020 system more attractive to taxpayers, as it removes many exemptions but offe₹lower rates. India’s central government sources quoted by Reute₹indicate that such tax reforms could encourage wider adoption of this system, Especially in the face of rising food inflation and weaker consumer demand. The government has not yet specified the exact revenue loss from any cuts, but the goal is to stimulate economic activity amid sluggish growth. India’s economy has faced a significant slowdown, with growth dropping to its slowest pace in seven quarters between July and September unexpectedly. Despite this, the government is optimistic that rural demand will continue to show resilience, and urban demand is expected to pick up. The country’s growth forecast for the fiscal year 2024/25 stands at 6.5 percent, at the lower end of its projected range. With challenges such as high inflation and global uncertainties, including a stronger US dollar, India’s tax reforms could play a critical role in boosting domestic consumption and supporting the middle class, which remains politically vocal about high tax burdens. Changes to tax structure this year Modifications to the income tax system occurred midway through the year 2024. The reason behind this is that the government announced the Union Budget 2024 in July, following the general elections that took place between April and June of that year. The income tax law amendments that were revealed in July 2024 may have slipped the minds of many taxpayers due to the budget's mid-year presentation. Beginning with the fiscal year 2024–25, the majority of the income tax adjustments that were announced in July 2024 go into effect. When you file your income tax return (ITR) in July 2025, you'll be able to claim different tax deductions and exemptions because of these changes. The government adjusted the income tax brackets under the new tax system. Major relief for Indian middle class? Govt mulls tax cuts amid economic challenges: Reports For the current fiscal year 2024–25, taxpayers will benefit from increased savings due to the reduced income tax brackets of the new tax system. The government raised the standard deduction limit and modified the income tax brackets under the new tax system. Standard deduction changes The standard deduction for people filing under the new tax regime for FY 2024-25 is ₹75,000, an increase from ₹50,000 in the prior regime. The revised tax structure raises the standard deduction for family pensioners from ₹15,000 to ₹25,000. For the fiscal year 2024–25 (modified for 2025–26), the standard deduction limit stays constant for individuals opting to utilise the prior tax framework. India considers income tax cuts to boost consumption The old tax system provided a standard deduction of ₹50,000 for salaried and pensioner individuals, and ₹15,000 for family pensioners. Salary earners and retirees can reduce their tax liability via the new regime's increased standard deduction, which they can use to their advantage. Salary, pension, or family pension recipients are eligible to take a standard deduction from their gross income before determining their tax liability. Funds paid out by insurance firms cannot be claimed as a standard deduction. National Pension Scheme changes An individual can get a bigger break on their employer's National Pension System (NPS) contribution if they choose the new tax system in FY 2024-25. Under the new system, worke₹can deduct their employers' NPS contributions up to 14 per cent of their base income. Up to 10 per cent of a worker's base income can be deducted in the past. To determine taxable income, this deduction is taken from gross income in accordance with Section 80CCD (2) of the Income Tax Act, 1961. This deduction is the sole one available under the new tax system, aside from the standard deduction. The previous tax system allowed for an additional deduction of ₹50,000 for NPS investments made under Section 80CCD (1b) and a Section 80C deduction of ₹1.5 lakh. Under the older tax system, the maximum amount that an employer may deduct from their NPS contributions for tax reasons remained unchanged. People who want to pay less tax under the new system will be able to do so thanks to a larger deduction offered under the new system compared to the previous one. Keep in mind that you would be responsible for paying taxes on employer contributions to EPF, NPS, and Superannuation funds if their combined value exceeds ₹7.5 lakh in a given fiscal year. Additionally, taxes will be withheld on both the interest and return that is generated on the excess contribution. Tax on capital gains changes In the fiscal year 2024–25, the government will enforce new laws on capital gains taxes. The objective of the amendments was to optimise the framework for taxing capital gains. A 20 per cent tax will be imposed on all short-term capital gains derived from shares and equity-oriented mutual funds. This has been increased from 15 per cent to 20 per cent. Income tax brackets applicable to earnings will be imposed on short-term capital gains derived from diverse assets, such as real estate, gold, and other non-financial holdings. The taxation rate for long-term capital gains is 12.5 per cent, irrespective of the asset type. The long-term capital gains tax rates will now be standardised across all asset classes. Long-term capital gains (LTCG) on investments in stocks and equity-oriented mutual funds are now exempt from taxes up to ₹1.25 lakh every fiscal year, an increase from the previous threshold of ₹1 lakh. The income tax on long-term capital gains (LTCG) on the sale of residential property is no longer entirely indexable. If an individual acquires a residence on or before July 22, 2024, and then divests it, they will incur taxation on long-term capital gains (LTCG) in two manners, as stipulated by the new regulations. Two methodologies exist: (a) LTCG tax with indexation, calculated at 20 per cent, and (b) LTCG tax without indexation, calculated at 12.5 per cent. In the absence of indexation benefits, long-term capital gains (LTCG) on the sale of a house acquired on or after July 23, 2024, will be subject to a tax rate of 12.5 per cent. Only residents and Hindu Undivided Families (HUFs) may elect the LTCG taxation option for homes acquired before July 23, 2024. Other taxable entities, including non-residents, will be obligated to remit 12.5 per cent without indexation. The revised capital gains tax framework simplifies the method by which individuals ascertain their taxable income from capital gains. In the past, various capital assets were subject to separate regulations for determining capital gains tax. Capital gains holding period changes The government has modified the time period for capital assets to further categorise capital gains as long-term or short-term. The new criteria stipulate two holding periods for capital assets to determine whether earnings are classified as short-term or long-term. Profits from the sale of any listed investment held for twelve months are classified as long-term capital gains. Conversely, for capital gains on non-listed assets to qualify as long-term, the holding period for these securities must be 24 months. Adjusting the holding period will facilitate taxpayers in monitoring the duration for which they must retain specific assets prior to sale, ensuring that their capital gains qualify as long-term capital gains.

Explainer : India considers income tax cuts, all you need to know

On the first of April, several countries will implement new changes. These include tax reform in India, a visa fee hike in the US, and the legalisation of cannabis possession in Germany.

On the first of April, several countries will implement new changes. These include tax reform in India, a visa fee hike in the US, and the legalisation of cannabis possession in Germany. Here's a brief overview to help you keep track of all these new changes. India tax reform India on April 1 is set to change income tax rules with the new income tax law setting in as the default tax regime. However, Taxpayers will still be able to choose from the prior regime. This move intends to make the tax filing process simple alongside encouraging more people to apply for this regime. Earlier in February Finance Minister Nirmala Sitharaman announced this during her budget speech. The tax rebate limit will now be increased to ₹7 lakh from erstwhile ₹5 lakh. Moreover, investments in debt mutual funds will now be taxed as short-term capital gains depriving investors of the long-term tax benefits that they used to enjoy previously. Besides this, if physical gold is converted to an Electronic Gold Receipt (EGR) and vice versa there will not be any capital gain tax. For senior citizen savings schemes, the maximum deposit limit will be increased to ₹30 lakhs from ₹15 lakhs. The maximum deposit limit for the monthly income scheme will be increased to ₹9 lakhs from 4.5 lakhs for single accounts and ₹15 lakhs from ₹7.5 lakhs for joint accounts. US visa fee hike People applying for non-immigrant US visas like H-1B, L-1, and EB-5 will experience a major fee hike from April 1. The changes come ahead of the presidential election potentially impacting immigration policies and international relations. The H-1B visa application fee (form I-129) has increased from USD 460 (over ₹38,000) to USD 780 (over ₹64,000). H-1B registration fees would rise from USD 10 (₹829) to USD 215 (nearly ₹17,000) beginning next year. The fee for L-1 visas has been increased from USD 460 (over ₹38,000) to USD 1,385 (over ₹1,10,000). The L-1 visa is a non-immigrant visa category in the US that allows multinational companies to transfer certain employees from their foreign offices to work in the US temporarily. The fee for EB-5 visa also known as investors visa has jumped from USD 3,675 (over ₹3,00,000) to USD 11,160 (over ₹9,00,000). Through the EB-5 program, high-net-worth foreign investors can obtain a US visa by investing at least USD 5,00,000 in a US business that helps create 10 jobs for American workers. Germany cannabis legalisation Germany has joined the list of countries establishing legal adult access to cannabis for recreational use. Last week the country passed the bill legalising cannabis usage for leisure purposes by legal adults. It was passed with a huge majority in the lower house. With this development, over half a billion people will have access to cannabis for recreational use. The new law is coming into force on April 1. People can keep up to 25g of cannabis for personal use and up to 50g at home under the provisions of the law. Moreover, it will also allow requests to remove criminal records for past possession offenses. Alongside this, the law legalises home growing of up to three cannabis plants for personal use, and establishes a regulatory framework for not-for-profit associations within which cannabis can be grown and supplied to members.

India tax reform, US visa fee hike, Germany cannabis legalisation: All new changes happening from April 1

Union Finance Minister Nirmala Sitharaman&nbsp;addressed&nbsp;a press conference after presenting the Union Budget 2023-24, with its&nbsp;focus&nbsp;on&nbsp;empowering women, promoting&nbsp;tourism, PM's&nbsp;Vikas scheme, and&nbsp;green growth.&nbsp;Sitharaman spoke to the press and said that the country has been waiting for a direct tax system that is straightforward and simple to follow.

"We are not compelling anybody. Those who want to remain in the old tax regime can still remain there. But, the new one is attractive because it gives a greater rebate. It also provides for simplified and smaller slabs, lower rates of taxation and also slabs which are nicely broken down,” said Sitharaman.

The Budget's proposed reforms would exempt individuals with yearly incomes of up to Rs 7 lakh from paying taxes under the new system, but they would not affect people who continue to pay taxes under the previous system, which offers tax breaks and deductions for investments and expenses like HRA.

Also read |&nbsp;<a href="https://www.wionews.com/business-economy/budget-2023-pm-modi-says-steps-taken-to-empower-middle-class-ensure-ease-of-living-557883">Budget 2023: PM Modi says steps taken to empower middle class, ensure ease of living</a>

The finance minister in her Budget for 2023–24 permitted a basic deduction of Rs. 50,000 under the new regime, in what is perceived as an attempt to persuade the salaried class to transfer to the new tax system where no exemptions on investments are offered.

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<blockquote class="twitter-tweet">
In the Union Budget 2023-24, the Allocation for the Welfare of Scheduled Castes has been increased from ₹ 1,42,342.36 Crore to ₹ 1,59,126.22 Crore.<a href="https://twitter.com/hashtag/AmritKaalBudget?src=hash&amp;ref_src=twsrc%5Etfw">#AmritKaalBudget</a> <a href="https://twitter.com/hashtag/UnionBudget2023?src=hash&amp;ref_src=twsrc%5Etfw">#UnionBudget2023</a> <a href="https://twitter.com/PMOIndia?ref_src=twsrc%5Etfw">@PMOIndia</a> <a href="https://twitter.com/narendramodi?ref_src=twsrc%5Etfw">@narendramodi</a> <a href="https://twitter.com/AmitShah?ref_src=twsrc%5Etfw">@AmitShah</a> <a href="https://twitter.com/FinMinIndia?ref_src=twsrc%5Etfw">@FinMinIndia</a> <a href="https://twitter.com/nsitharaman?ref_src=twsrc%5Etfw">@nsitharaman</a> <a href="https://twitter.com/Drvirendrakum13?ref_src=twsrc%5Etfw">@Drvirendrakum13</a> <a href="https://twitter.com/ANarayana_swamy?ref_src=twsrc%5Etfw">@ANarayana_swamy</a> <a href="https://t.co/RRq63eUDXH">pic.twitter.com/RRq63eUDXH</a>
— Ministry of Social Justice &amp; Empowerment, GOI (@MSJEGOI) <a href="https://twitter.com/MSJEGOI/status/1620757120181501952?ref_src=twsrc%5Etfw">February 1, 2023</a></blockquote>
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An analogous deduction is allowed under the previous tax code, and there is no tax on income up to Rs 5 lakh.

The ultimate interest is to make the simpler (new) regime more attractive," Sitharaman said.

"I propose to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500," she added.

She added that the Prime Minister has given a vision for “LiFE", or Lifestyle for Environment, to spur a movement of environmentally conscious lifestyle.&nbsp;

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Video source: PIB

Sitharaman's also commemorated the&nbsp;Azadi Ka Amrit Mahotsav, a one-time new small savings scheme and the&nbsp;Mahila Samman Savings Certificate which&nbsp;will be made available for a two-year period up to March 2025, reported ANI.&nbsp;

The Mahila Samman Savings Patra has a deposit facility of up to Rs 2 lakh with a fixed interest rate of 7.5%.

"One-time new small saving under 'Mahila Samman Saving Patra'. The deposit facility for the women and girls will be for a period of two years with a rate of interest of 7.5 per cent," Sitharaman announced.

On the&nbsp;technology and finance front, Sitharaman said that the government&nbsp;is&nbsp;looking at a futuristic fintech sector where people will be trained through Industrial Revolution 4.0.&nbsp;

"People will be trained through Industrial Revolution 4.0, we are trying to unleash digital economy in various walks of life," she said in an address to the media.

Sitharaman presented the last full-fledged Union Budget of the Modi government on&nbsp; February 1 before the 2024 Lok Sabha elections.&nbsp;

(With inputs from agencies)

WATCH WION LIVE HERE:

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Union Finance Minister Nirmala Sitharaman addressed a press conference after presenting the Union Budget 2023-24, with its focus on empowering women, promoting tourism, PM's Vikas scheme, and green growth.

Union Finance Minister Nirmala Sitharaman addressed a press conference after presenting the Union Budget 2023-24, with its focus on empowering women, promoting tourism, PM's Vikas scheme, and green growth. Sitharaman spoke to the press and said that the country has been waiting for a direct tax system that is straightforward and simple to follow. "We are not compelling anybody. Those who want to remain in the old tax regime can still remain there. But, the new one is attractive because it gives a greater rebate. It also provides for simplified and smaller slabs, lower rates of taxation and also slabs which are nicely broken down,” said Sitharaman. The Budget's proposed reforms would exempt individuals with yearly incomes of up to Rs 7 lakh from paying taxes under the new system, but they would not affect people who continue to pay taxes under the previous system, which offers tax breaks and deductions for investments and expenses like HRA. Also read | Budget 2023: PM Modi says steps taken to empower middle class, ensure ease of living The finance minister in her Budget for 2023–24 permitted a basic deduction of Rs. 50,000 under the new regime, in what is perceived as an attempt to persuade the salaried class to transfer to the new tax system where no exemptions on investments are offered. In the Union Budget 2023-24, the Allocation for the Welfare of Scheduled Castes has been increased from ₹ 1,42,342.36 Crore to ₹ 1,59,126.22 Crore.#AmritKaalBudget #UnionBudget2023 @PMOIndia @narendramodi @AmitShah @FinMinIndia @nsitharaman @Drvirendrakum13 @ANarayana_swamy pic.twitter.com/RRq63eUDXH — Ministry of Social Justice & Empowerment, GOI (@MSJEGOI) February 1, 2023 × An analogous deduction is allowed under the previous tax code, and there is no tax on income up to Rs 5 lakh. The ultimate interest is to make the simpler (new) regime more attractive," Sitharaman said. "I propose to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500," she added. She added that the Prime Minister has given a vision for “LiFE", or Lifestyle for Environment, to spur a movement of environmentally conscious lifestyle. × Video source: PIB Sitharaman's also commemorated the Azadi Ka Amrit Mahotsav, a one-time new small savings scheme and the Mahila Samman Savings Certificate which will be made available for a two-year period up to March 2025, reported ANI. The Mahila Samman Savings Patra has a deposit facility of up to Rs 2 lakh with a fixed interest rate of 7.5%. "One-time new small saving under 'Mahila Samman Saving Patra'. The deposit facility for the women and girls will be for a period of two years with a rate of interest of 7.5 per cent," Sitharaman announced. On the technology and finance front, Sitharaman said that the government is looking at a futuristic fintech sector where people will be trained through Industrial Revolution 4.0. "People will be trained through Industrial Revolution 4.0, we are trying to unleash digital economy in various walks of life," she said in an address to the media. Sitharaman presented the last full-fledged Union Budget of the Modi government on February 1 before the 2024 Lok Sabha elections. (With inputs from agencies) WATCH WION LIVE HERE:

No compulsion to make the shift, but new tax regime more attractive, says FM Nirmala Sitharaman

Individuals having an annual salary income of over Rs 13 lakh and availing deductions of up to Rs 2 lakh will save on their tax outgo if they opt for the new tax regime proposed in the Budget, government sources said on Sunday.

For those earning a salary of Rs 12 lakh and less and availing deductions of up to Rs 2 lakh, the old tax system will be beneficial as the tax outgo will be less compared to the proposed new structure.

As per data, as many as 5.3 crore taxpayers out of 5.78 crore claimed deductions of less than Rs 2 lakh (standard deduction, provident fund, home loan interest, contribution to national pension scheme, life insurance, medical insurance etc.) while filing income tax returns.

This means that about 90 per cent of taxpayers actually claim deduction of less than Rs 2 lakh.

Offering an optional lower rate of income tax to individuals, Finance Minister Nirmala Sitharaman in the Budget 2020-21 proposed new tax slabs of 15 per cent and 25 per cent in addition to the existing 10 per cent, 20 per cent and 30 per cent.

Under the proposed tax slab, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning a salary between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while earning of Rs 7.5 and 10 lakh to attract 15 per cent tax.

Those earning a salary between Rs 10 and 12.5 lakh will pay tax at the rate of 20 per cent, while income between Rs 12.5 and Rs 15 lakh will be liable to pay 25 per cent tax. Income above Rs 15 lakh will be taxed at 30 per cent.

The new slabs would be for individuals not availing certain specified deductions or exemptions.

While individuals with an annual salary income of Rs 13 lakh and above will pay Rs 1.43 lakh tax under the proposed tax structure; in the old regime, they would have paid a tax of Rs 1.48 lakh, thereby saving Rs 5,200, a source said.

On salary of Rs 14 lakh a year, savings would be Rs 10,400; and for those with income of Rs 15 lakh and above, savings would be Rs 15,600, provided the deductions claimed are up to Rs 2 lakh.

In case of non-salary earners, who do not get standard deduction of Rs 50,000, the new tax structure is beneficial for those earning Rs 9.5 lakh annually and availing deductions up to Rs 1.5 lakh. They would save Rs 5,200 in their annual income tax outgoing.&nbsp;

Individuals having an annual salary income of over Rs 13 lakh and availing deductions of up to Rs 2 lakh will save on their tax outgo if they opt for the new tax regime proposed in the Budget, government sources said on Sunday.

Individuals having an annual salary income of over Rs 13 lakh and availing deductions of up to Rs 2 lakh will save on their tax outgo if they opt for the new tax regime proposed in the Budget, government sources said on Sunday. For those earning a salary of Rs 12 lakh and less and availing deductions of up to Rs 2 lakh, the old tax system will be beneficial as the tax outgo will be less compared to the proposed new structure. As per data, as many as 5.3 crore taxpayers out of 5.78 crore claimed deductions of less than Rs 2 lakh (standard deduction, provident fund, home loan interest, contribution to national pension scheme, life insurance, medical insurance etc.) while filing income tax returns. This means that about 90 per cent of taxpayers actually claim deduction of less than Rs 2 lakh. Offering an optional lower rate of income tax to individuals, Finance Minister Nirmala Sitharaman in the Budget 2020-21 proposed new tax slabs of 15 per cent and 25 per cent in addition to the existing 10 per cent, 20 per cent and 30 per cent. Under the proposed tax slab, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning a salary between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while earning of Rs 7.5 and 10 lakh to attract 15 per cent tax. Those earning a salary between Rs 10 and 12.5 lakh will pay tax at the rate of 20 per cent, while income between Rs 12.5 and Rs 15 lakh will be liable to pay 25 per cent tax. Income above Rs 15 lakh will be taxed at 30 per cent. The new slabs would be for individuals not availing certain specified deductions or exemptions. While individuals with an annual salary income of Rs 13 lakh and above will pay Rs 1.43 lakh tax under the proposed tax structure; in the old regime, they would have paid a tax of Rs 1.48 lakh, thereby saving Rs 5,200, a source said. On salary of Rs 14 lakh a year, savings would be Rs 10,400; and for those with income of Rs 15 lakh and above, savings would be Rs 15,600, provided the deductions claimed are up to Rs 2 lakh. In case of non-salary earners, who do not get standard deduction of Rs 50,000, the new tax structure is beneficial for those earning Rs 9.5 lakh annually and availing deductions up to Rs 1.5 lakh. They would save Rs 5,200 in their annual income tax outgoing.

Individuals earning salary of over Rs 13 lakh a year to save under new tax regime

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