Standard Deduction Big Relief in Budget 2024-25

Direct Taxes

• Efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation to be continued.
• Enhance revenues for funding development and welfare schemes of government.
• 58 per cent of corporate tax from simplified tax regime in FY23, more than two-thirds taxpayers availed simplified tax regime for personal income tax in FY 24.

Simplification for Charities and of TDS

• Two tax exemption regimes for charities to be merged into one.
• 5 per cent TDS rate on many payments merged into 2 per cent TDS rate.
• 20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.
• TDS rate on e-commerce operators reduced from one to 0.1 per cent.
• Delay for payment of TDS up to due date of filing statement decriminalized.

Simplification of Reassessment

• Assessment can be reopened beyond three years upto five years from the end of Assessment Year only if the escaped income is ₹ 50 lakh or more.
• In search cases, time limit reduced from ten to six years before the year of search.

Simplification and Rationalisation of Capital Gains

• Short term gains on certain financial assets to attract a tax rate of 20 per cent.
• Long term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.
• Exemption limit of capital gains on certain financial assets increased to ₹ 1.25 lakh per year.

Tax Payer Services

• All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.

Litigation and Appeals

• ‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.
• Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to ₹60 lakh, ₹2 crore and ₹5 crore respectively.
• Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.

Employment and Investment

• Angel tax for all classes of investors abolished to bolster start-up eco-system,.
• Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.
• Safe harbour rates for foreign mining companies selling raw diamonds in the country.
• Corporate tax rate on foreign companies reduced from 40 to 35 per cent.

Deepening tax base

• Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent respectively.
• Income received on buy back of shares in the hands of recipient to be taxed.

Social Security Benefits.

• Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.
• Non-reporting of small movable foreign assets up to ₹20 lakh de-penalised.

Other major proposal in Finance Bill

• Equalization levy of 2 per cent withdrawn.

Changes in Personal Income Tax under new tax regime

• Standard deduction for salaried employees increased from ₹50,000 to ₹75,000.
• Deduction on family pension for pensioners enhanced from ₹15,000/- to ₹25,000/-
• Revised tax rate structure:

0-3 lakh rupees	Nil
3-7 lakh rupees	5 per cent
7-10 lakh rupees	10 per cent
10-12 lakh rupees	15 per cent
12-15 lakh rupees	20 per cent
Above 15 lakh rupees	30 per cent

• Salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax.