Budget For Common Man: Income Tax Standard Deduction For Salaried Employees May Rise To Rs 1 Lakh, Check What Reports Say

Now that the Budget dates have officially been announced by the government, the expectations from Finance Minister Nirmala Sitharaman from the Union Budget 2024 have gained further momentum. As per reports in several media, Standard Deduction for the salaried employees may rise to Rs 1 lakh from Rs 50,000 under the new concessional tax regime. Some media reports have also added that while the Standard Deduction will be doubled under the new tax regime, it will remain unchanged at Rs 50,000 p.a under the old tax regime

The Income Tax Rules state that Standard deduction of Rs 50,000 or the amount of salary, whichever is lower, is available for both old and new tax regimes from AY 2024-25 onwards.

Union Budget, 2024-25 will be presented in Lok Sabha on 23 July, 2024. The President of India, on the recommendation of Government of India, has approved the proposal for summoning of both the Houses of Parliament for the Budget Session, 2024 from 22nd July, 2024 to 12 August, 2024, subject to exigencies of Parliamentary Business. The Pre-Budget consultations for Union Budget 2024-25 that started from 19th June 2024 onward in the Ministry of Finance and chaired FM Nirmala Sitharaman, concluded on 5th July 2024.

It may be recalled that in the Union Budget 2023, FM Nirmala Sitaraman had made five major announcements with respect to personal income tax. Presenting the Union Budget 2023-24 in Parliament, FM announced tax sops pertaining to rebate, change in tax structure, extension of benefit of standard deduction to the new tax regime, reduction of highest surcharge rate and extension of limit of tax exemption on leave encashment on retirement of non-government salaried employees.

The Finance Minister proposed 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. At present, standard deduction of Rs 50,000 to salaried individuals and deduction from family pension up to Rs 15,000 is currently allowed only under the old regime.

In the 2023 budget, FM had proposed to make the new income tax regime as the default tax regime.  However, citizens will continue to have the option to avail the benefit of the old tax regime.