Budget 2024: Here's the Complete Income Tax Rate Structure in a Nutshell [Read Bill]

The Union Finance Minister Nirmala Sitharaman announced the budget for the present financial year today at 11 am. Several changes have been proposed to income tax rates. It is vital to note that the changes have been brought only to the new tax regimes. The old tax regime remains untouched in the present Union budget.

Tax rate changes have been made to the tax deducted at source.

Now we will be looking in detail at each of the changes brought into the new tax regime.

Section 115 ABC  of the Income Tax Act of 1961, deals with the new slab rates in the new tax regime.

In Budget 2024, the new income tax regime has 5 tax slabs. But in today's budget, changes have been brought into the new tax regimes, such as a 5% tax being levied on an income from 3 to 6 lakh rupees, but now 5% is charged from 3 to 7 lakh rupees. Thus, we can note that in the slab, the upper limit has been increased by Rs. 1 lakh.

Total income earned	Rate of Taxation
Upto RS. 3,00,000	Nil
RS. 3,00,000 to Rs. 7,00,000	5%
Rs. 7,00,000 to Rs. 10,00,000	10%
Rs. 10,00,000 to Rs. 12,00,000	20%
Rs.15,00,000	30%

 Standard deductions for salaried individuals have been raised from Rs. 50,000 to Rs. 75,000 under the new tax regimes.

Rates have been changed on Tax Deducted at Source (TDS).

A good thing to note is that in the case of TDS, the budget has reduced the TDS rates, which is beneficial to the taxpayer in the long run.

Section 194 DA: The TDS rate on payments connected to life insurance policies has been cut from 5% to 2%, which applies to all payers and residents.

Section 194F: The TDS, which is charged on the repurchase of units by mutual funds or UTI, has been omitted.

Section 194G: The TDS rate on commissions and other payments from the sale of lottery tickets has been decreased from 5% to 2%, and applies to anybody involved in the business of stocking, distributing, purchasing, or selling lottery tickets.

Section 194-IB: The TDS rate on rent payments by certain individuals or HUFs has been decreased to 2% from 5%.

 Section 194M: The TDS for payments to contractors, commission agents, brokers, or professionals by certain individuals or HUFs has been reduced from 5% to 2%.

Section 194-O: The TDS rate on payments by e-commerce operators to e-commerce participants has been reduced to 0.1%.

Section 194T: A TDS rate of 10% has been introduced for payments that are in the  nature of salary, remuneration, common interest to partners of the firm, etc., exceeding Rs. 20000 in a particular financial year.

Tax rates have been changed on short-term capital gains in certain cases, such as the Short Term Capital Gain Tax (STCG), which up to July 23rd, which is today, was 15%, and the STCG from July 2024 is 20%. The relevant section applicable is Section 111 A of the Income Tax Act of 1961.

Section 112 of the Income Tax Act deals with the tax charged on long-term capital gains (LTCG). The LTCG has decreased to 12.5% from 20%. 

Tax rates have been brought to the maximum remuneration allowable to partners under Section 40(b) of the Income Tax Act of 1961.

It is also vital to note that a new section 194T, added to the Income Tax Act 1961 from April 1, 2025, states that if a partner of the firm receives more than Rs.20,000/- in salary, pay, commission, bonus, or interest, TDS is applied at 10%.

Thus, by making several changes in the tax rates, the government aims to earn revenue without causing a burden to the taxpayer.

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