Budget brings relief for salaried class under new tax regime : Mobile phones to become cheaper

PTI, NEW DELHI, 23 July 2024: In sops for the middle class, Finance Minister Nirmala Sitharaman on Tuesday hiked standard deduction by 50 per cent to Rs. 75,000 and tweaked tax slabs under the new income tax regime to provide more money in the hands of salaried class with a view to boost consumption.

She said salaried employees in the new tax regime could save up to Rs.17,500 in income tax annually following the changes announced in the Budget.

The standard deduction for salaried employees is proposed to be increased from Rs. 50,000 to Rs. 75,000 annually. Similarly, deduction on family pension for pensioners is proposed to be enhanced from Rs. 15,000 to Rs 25,000.

“This will provide relief to about four crore salaried individuals and pensioners,” Sitharaman said in her Budget speech.

In the last fiscal, more than two-thirds individual taxpayers have availed the new personal income tax regime. Over 8.61 crore I-T returns were filed in 2023-24 fiscal.

The new tax slabs under the new income tax regime will be effective from April 1, 2024. (Assessment Year 2025-26).

Sitharaman said income of up to Rs. 3 lakh will continue to be exempted from income tax under the new regime.

As per the proposal, a 5 per cent tax will be levied on income between Rs. 3-7 lakh, 10 per cent between Rs. 7-10 lakh, 15 per cent for Rs. 10-12 lakh.

However, 20 per cent tax will continue to be levied on income between Rs. 12-15 lakh and 30 per cent for income above Rs 15 lakh.

Under the existing new I-T regime, a 5 per cent tax is levied on income between Rs. 3-6 lakh, 10 per cent for income between Rs 6-9 lakh.

Income between Rs. 9-12 lakh and Rs. 12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively. A 30 per cent I-T would be applicable on income above Rs.15 lakh.

Imported mobile phones will become cheaper by up to six percent as the Union government has reduced customs duty on such shipments from 20 percent to 15 percent in the FY25 budget. The Finance Minister, while presenting the Union Budget for fiscal year 2024-25 on Tuesday, proposed slashing import duty on mobile phones, chargers, and some components used for manufacturing handsets.

She said with a three-fold increase in domestic production and almost a 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured. "In the interest of consumers, I now propose to reduce the BCD (basic customs duty) on mobile phones, mobile PCBAs, and mobile chargers to 15 percent," Sitharaman said. Earlier, the BCD on mobile phones, chargers, and motherboards was 20 percent.

The government has proposed to exempt specified goods for use in manufacturing connectors in mobile phones and oxygen-free copper for use in manufacturing resistors (an electronic component) from the BCD levy. The government also proposed to fully exempt three cancer medicines from customs duties. The government proposes to cut customs duties on Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from 10 percent to nil.

"To provide relief to cancer patients, I propose to fully exempt three more medicines from customs duties," Sitharaman said while presenting the Union Budget for 2024-25 in the Lok Sabha. She also proposed changes in the basic customs duty (BCD) on x-ray tubes and flat panel detectors for use in medical x-ray machines under the phased manufacturing programme, to synchronise them with domestic capacity addition.