Budget 2024: Here’s how much income tax you will pay now if you earn ₹5 lakh

Finance Minister Nirmala Sitharaman presented her seventh consecutive budget on July 23. This budget marks the first budget of the third Modi-led government. The finance minister has made key changes in the income tax slabs while maintaining the income tax rates.

Here is how much will you pay if you earn ₹5 lakh.

An individual earning ₹5 lakh salary has to pay ₹10,000, according to Siddharth Maurya, founder and managing director of Vibhavangal Anukulakara pvt ltd. This progressive taxation structure makes it possible for those in the lower brackets to pay lesser taxes, Maurya said.

The rate remains nil for individuals earning less than ₹3 lakh. The slab of ₹3 lakh to ₹6 lakh has been expanded to ₹3 lakh to ₹7 lakh . The rate of taxation, that is 5%, remains unchanged. Similarly, the other new tax slabs are Rs7 lakh to Rs10 lakh at 10%, Rs10 lakh to Rs12 lakh at 15%, ₹12 lakh to ₹15 lakh at 20% and income above ₹15 lakh at 30%.

Apart from changing the tax slabs the government has changed the standard deduction to ₹75,000 from ₹50,000 earlier. The standard deduction is a provision by which a fixed amount is deducted from the gross income of salaried individuals and pensioners before arriving at their taxable income. 

The government has proposed to raise the deduction in family pension to ₹25,000 from ₹15,000 for pensioners. The objective of the proposed change is to relieve those individuals who receive a family pension to ensure better post-retirement financial stability.

The finance minister said that the government will forgo a revenue of ₹7,000 crore due to the changes in the income tax regime.

Sitharaman also proposed to review and simplify the Income Tax Act, 1961

During her Budget speech,  Sitharaman said, "I announce a comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months."