Income Tax Day 2024: From standard deduction to revised income tax regime, what’s in Union Budget for taxpayers

Income Tax Day 2024 is celebrated every July 24 to mark the introduction of income tax in India by Sir James Wilson in 1860. This year, Income Tax Day is preceded by the Union Budget 2024 announcement, which includes key changes affecting income taxpayers.

Here are the key changes related to income tax announced by Finance Minister Nirmala Sitharaman in her budget speech on Wednesday.

Increase in the standard deduction

Under the new tax regime, the government has raised the standard deduction for salaried employees from ₹50,000 to ₹75,000. The deduction for family pensioners has also been increased from ₹15,000 to ₹25,000.

Re-assessment of old ITR beyond 3 years

As per the latest announcement, only taxpayers with more than ₹50 lakh annual income can face re-assessment of their old Income Tax Returns (ITR) after three years. Tax authorities cannot open ITR filed of other income taxpayers beyond a certain time limit.

Revised tax regime

FM Nirmala Sitharaman also announced a revision in the new tax regime under the Union Budget 2024. The revised tax regime will benefit salaried employees of up to ₹17,500 in income tax. In the last financial year, nearly more than two-thirds of individual taxpayers opted for the new tax regime and more than 8.61 crore IT returns were filed in FY 24.

Revised structure of new tax regime

Under the revised tax regime, income of ₹3 lakh will be exempted from income tax under the new regime. Under the new regime, a 5 per cent tax will be levied on income between 3-7 lakh, 10 per cent between ₹7-10 lakh, 15 per cent between ₹10-12 lakh.

Taxpayers with income between ₹12-15 lakh will have to pay 20% tax, whereas 30% tax is levied for income above ₹15 lakh. The new tax slabs under the new income tax regime will be effective from April 1, 2025. (Assessment Year 2025-26).