Tax Slab Explainer: 3.75 lakh or 7.75 lakh, how much income will be tax free? Learn math

Finance Minister Nirmala Sitharaman presented the first budget of the Modi government's third term in Parliament today .  In which changes in tax slabs were announced. So far in the new tax regime, Rs. 50,000 including standard deduction, effectively Rs. Income up to 7.5 lakhs was tax-free, as the government allowed Rs. 3 to 6 and 6 to 9 lakhs were levied on taxes paid in slabs.

Standard deduction limit increased

Under the provisions of the Income Tax Act – 87A is used to grant tax exemption. In the 2024-25 budget, the standard deduction limit has been increased to Rs 75,000, while income in the tax slab of Rs 3 to 7 lakh has been taxed at 5%. The finance minister's speech has not yet clarified whether the government will continue to give tax rebates or not.

If the government continues to give tax rebates, the income of a common man will be tax free of 7.75 lakh rupees. But if the government implements changes in the income tax slabs and cancels the tax rebate, only his income of Rs 3.75 lakh will be tax free. While according to the tax slab of 3 to 7 lakh rupees, 3.25 lakh rupees i.e. 16,250 rupees will be taxed at 5 percent.

The tax slabs of the new tax regime have changed

The government has also simplified the tax slabs in the new tax regime. Now in the new tax slab, there will be zero tax rate on income up to 3 lakh rupees. This is as before. Now the income of 3 to 7 lakh rupees will be taxed at the rate of 5 percent. Earlier this tax slab was 3 to 6 lakh rupees.

Similarly, the government has reduced the income tax slab from Rs 6 to Rs 9 lakh to Rs 7 to 10 lakh. The tax rate on it will be 10 percent. At the same time, the tax will be levied at the rate of 15 per cent on income between Rs 10 to 12 lakh, 20 per cent on income between Rs 12 to 15 lakh and 30 per cent on income above Rs 15 lakh.

New tax slab of new tax regime

Pensioners will get additional benefits

In addition to increasing the standard deduction limit in the new tax regime, the government has also provided additional benefits to pensioners. Now the pensioners will get a tax rebate of up to Rs 25,000 on family pension. Earlier this limit was Rs 15,000.

This way you will benefit from capital gains in the old tax regime

Finance Minister Nirmala Sitharaman has not made any sweeping changes to the old tax system. But the government has simplified capital gains tax, which will also benefit taxpayers under the old tax regime. Also take a look at this.

This way you will benefit from the capital gains in the old tax regime

• Finance Minister Nirmala Sitharaman has not made any sweeping changes to the old tax system. But the government has simplified capital gains tax, which will also benefit taxpayers under the old tax regime. Also take a look at this.
• Henceforth, short-term capital gains on certain financial assets will be taxed at 20 percent. Whereas all other financial assets and non-financial assets will be taxed as per the taxpayer's slab.
• The government has made major changes in the matter of long term capital gain. Henceforth all financial and non-financial assets will be taxed at the rate of 12.5 percent. The government has increased the tax exemption on long-term capital gain income. Earlier earnings up to Rs 1 lakh were tax free, now this limit will be Rs 1.25 lakh.
• If you invest money in any listed financial asset and keep it invested for one year. So this will come in long term investment. While only investments up to two years in unlisted financial assets will be eligible for long-term capital gains.
• The government has said that capital gains tax will be levied on unlisted bonds, debentures, debt mutual funds and market linked debenture funds as per the tax slab.