A pleasant surprise awaits personal income tax payers in interim budget 2024-25
NEW DELHI : The interim budget on 1 February is likely to increase the tax rebate under the new personal income tax regime, two people close to the discussions said, giving relief for the middle class ahead of the approaching general elections. The plan is to raise the tax rebate, which is now available for income up to ₹7 lakh, to about ₹7.5 lakh under the new regime, the people said on the condition of anonymity. Tax rebate eligibility is calculated on the net income after taking into account standard deduction of ₹50,000.
Accordingly, a person with income of ₹7.5 lakh, after accounting for the standard deduction, will not have to pay any income tax from 2024-25 onwards, according to the proposal under discussion. “This is aimed at giving tax benefit to the hard-working middle class. Of course, in the full-year budget to be presented later in the year (after the national elections), finer modifications could be made," one of the two people said.
The interim budget to be presented by Union finance minister Nirmala Sitharaman is likely to have a Finance Bill proposing the change. Emails sent to a finance ministry spokesperson on Friday seeking comments remained unanswered till press time. In the last Union budget, the government raised the rebate available under the new personal income tax regime from ₹5 lakh to ₹7 lakh, while also raising the basic exemption limit to ₹3 lakh from ₹2.5 lakh earlier.
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