Union Budget 2024: What's in Store for Salaried Individuals?

The Union Budget 2024 was presented by FM Nirmala Sitharaman on 23rd July 2024. Traces of unhappiness from the budget were seen immediately on the Indian Share Market. Similarly, the salaried taxpayers are also majorly disappointed as there were no changes proposed in the tax Slabs. Many taxpayers directly/in directly shown their disappointment by creating meme and on social media platform.
Let's try to analyze and understand, the impact of proposed changes on salaried employees.

1. Tax slab changes for New Regime
In the budget, following Tax slab changes are announced under New tax regime.

• Please note there are no changes in the Tax slabs under Old tax regime.
• Similarly, the Health and Education cess and Surcharge is unchanged.
With these changes, the Tax slabs applicable for New Tax regime and Old tax regime are:

2. Standard Deduction
Standard deduction to salaried individuals and pensioners is proposed to be increased from ₹ 50,000 to ₹ 75,000 under the New tax regime.
Please note for the Salaried individuals and Pensioners opting for the Old Tax regime applicable standard deduction will be ₹ 50,000 only.
3. Family Pension Deduction
Deduction u/Sec 57(IIA) from family pension of ₹ 15,000 is increased to ₹ 25,000 under the New tax regime.
Please note no change for the Old Tax regime.
4. New Pension Scheme Contribution
Private employees in the New Tax regime shall be allowed a deduction of an amount up to 14 % of the employee’s basic salary in place of 10 %.
No changes for employees under Old tax regime
5. Changes in Income from House Property
It is proposed that income from letting out of a house or part of the house by the owner, shall not be charged under the head ‘profits and gains of business or profession’ and will be chargeable to tax under the head ‘income from house property’ only.
6. Changes in Capital Gain Taxes
Following are the changes proposed in the union budget with immediate effect.
• Short Term Capital Gain
1. Short term capital gains on specified financial assets like shares of listed companies, shall charge tax rate of 20 % instead of 15 %.
2. Listed financial assets held for less than a year are classified as short term.
3. Unlisted financial assets and all non-financial assets held for less than two years are classified as short-term.
• Long Term Capital Gain
1. Long term gains on all financial and non-financial assets will attract a tax rate of 12.5 % instead of 10 %.
2. The limit of exemption on certain listed financial assets has increased from ₹ 1 lakh to ₹ 1.25 lakh per year.
3. Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.
7. Securities Transaction Tax (STT) rates
It is proposed to increase the rates of STT on sale of an Option in securities from 0.0625 % to 0.1 % of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 % of the price at which such futures are traded.
8. Buy-back of shares
It is proposed that the income from buy-back of shares by companies be chargeable in the hands of the Recipient investor as dividend, instead of the current regime of additional income-tax in the hands of the company. Further, the cost of such shares shall be treated as a capital loss to the investor.

References

• Union Budget 2024 Speech Union Budget 2024 Fine Print
• Income Tax Calculator Income Tax Calculator

Legal Disclaimer: The information provided is based on the current laws for FY 2024-25, FY 2023-24 and FY 2022-23and readers should verify details with relevant authorities. Keep in mind that the process and options might vary slightly based on updates to the Income Tax e-Filing portal or changes in procedures, so it is a good idea to refer to the latest guidance available on the portal.