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Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024
The existing provision of clause (ia) of section 16 of the Act provides that a deduction of fifty thousand rupees or the amount of the salary, whichever is less, shall be made before computing the income under the head “Salaries”.
2. Further, the existing provision of clause (iia) of section 57 of the Act provides that in the case of income in the nature of family pension, a deduction of a sum equal to thirty-three and one-third per cent of such income or fifteen thousand rupees, whichever is less, shall be made before computing the income chargeable under the head "Income from other sources".
3. With the aim of encouraging and incentivizing taxpayers (specially the salaried taxpayers) to shift to the new tax regime, it is proposed to insert a proviso after clause (ia) of section 16 to provide that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC of the Act, the provisions of this clause shall have effect as if for the words “fifty thousand rupees”, the words “seventy five thousand rupees” had been substituted.
4. It is also proposed to insert a proviso in clause (iia) of section 57 to provide that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC of the Act, the provisions of this clause shall have effect as if for the words “fifteen thousand rupees”, the words “twenty five thousand rupees” had been substituted.
5. These amendments will take effect from the 1st day of April, 2025, and will accordingly apply to assessment year 2025-26 and subsequent assessment years.
[Clauses 10 & 24]
Full Text:
Standard deduction increase under new tax regime raises allowable salary and family pension deductions to incentivize regime shift. An amendment makes the standard deduction for salaries and the family pension deduction operate as if the lower statutory caps were substituted by higher caps where income-tax is computed under the specified clause of the new tax regime; these substitutions apply only when tax is computed under that new-regime provision and take effect from the stated future assessment year. of Press 'Enter' after typing page number.
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