Finance Minister Nirmala Sitharaman Announces Tax Relief for Middle Class in 2024 Budget
New Delhi, August 7: Finance Minister Nirmala Sitharaman announced several measures to provide relief to the middle class during her speech in the Lok Sabha. She highlighted that the government has significantly liberalized personal income tax slabs in 2023 and further revised them in the new tax-filing regime presented in the Union Budget last month.
Key Announcements
Sitharaman emphasized that the government, led by Prime Minister Narendra Modi, did not impose additional tax burdens during the COVID-19 pandemic. Instead, the focus has been on simplifying taxation and reducing the burden on taxpayers.
Standard Deduction Increase
The standard deduction for salaried employees has been increased from Rs 50,000 to Rs 75,000, providing an effective relief of up to Rs 17,500 for a salaried employee.
Capital Gains Exemption
The limit of exemption on capital gains for certain listed financial assets has been raised from Rs 1 lakh to Rs 1.25 lakh per year.
Angel Tax Abolished
To support the startup ecosystem, the so-called angel tax for all classes of investors has been abolished. This move is expected to drive more investments towards startups.
Property Transaction Tax Relief
An amendment in the Finance Bill proposes that taxpayers on property transactions can choose between a lower tax of 12.5% without indexation or a higher rate of 20% with indexation, if the property is acquired before July 23, 2024.
Impact on Salaried Employees and Pensioners
The deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000 to Rs 25,000, providing relief to about four crore salaried individuals and pensioners.
Budget Session and Finance Bill
The Lok Sabha discussed the Finance Bill after passing the Appropriation Bill for the central government’s expenditure for 2024-25. The passage of the Finance Bill by Parliament will complete the budget process.
Sitharaman’s Union Budget 2024, presented on July 23, marks her seventh consecutive budget, surpassing the late Moraji Desai’s record of six consecutive budgets. The budget session of Parliament began on July 22 and will end on August 12.
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is responsible for managing the country’s money and finances. In India, this person is Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is a politician in India who is currently the Finance Minister. She helps make decisions about how the government spends and collects money.
Tax Relief -: Tax relief means reducing the amount of money people have to pay to the government in taxes. This helps people save more money.
Middle Class -: The middle class refers to people who are not very rich but also not very poor. They usually have stable jobs and can afford basic needs and some extra comforts.
Union Budget -: The Union Budget is a plan made by the government about how it will collect and spend money for the year. It is presented by the Finance Minister.
Standard Deduction -: Standard deduction is a fixed amount of money that salaried employees can subtract from their total income before calculating how much tax they need to pay.
Salaried Employees -: Salaried employees are people who get a fixed amount of money (salary) every month for the work they do.
Capital Gains -: Capital gains are the profits you make when you sell something like stocks or property for more than you bought it.
Exemption Limit -: Exemption limit is the maximum amount of money that is not taxed. If you earn less than this amount, you don’t have to pay tax on it.
Angel Tax -: Angel tax is a tax that was charged on the money invested in startups by individuals. It has now been abolished, meaning investors don’t have to pay this tax anymore.
Investors -: Investors are people who put their money into businesses or other ventures with the hope of making more money in the future.
Finance Bill -: The Finance Bill is a proposal made by the government that includes all the changes in taxes and other financial rules for the year.
Property Transactions -: Property transactions are deals where people buy or sell land, houses, or buildings.
Budget Session -: The budget session is a period when the government meets to discuss and approve the Union Budget. It usually lasts for a few weeks.
