How Does the Union Budget 2024-25 Impact You?

The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, introduces a series of reforms and initiatives aimed at fostering economic stability and growth. But does it really put more money in your pocket, or does it complicate the tax landscape? With changes to the income tax regime, increased standard deductions, and new employment schemes, the budget’s impact on your financial health hinges on your income level and financial decisions. For anyone earning over Rs 10 lakh annually, the adjustments in tax slabs and standard deductions might seem beneficial, but what about the middle class and job seekers?

Key Highlights of the Budget

Tax Reforms and Relief Measures

One of the standout features of this budget is the introduction of revised income tax slabs under the new regime. These changes aim to simplify the tax structure and provide relief to taxpayers across different income brackets. The revised tax slabs are expected to reduce the overall tax burden and increase disposable income for individuals.

Focus on Employment and Skilling

The budget places significant emphasis on employment generation and skill development. Several initiatives are aimed at equipping the workforce with the necessary skills to thrive in a rapidly evolving job market. This includes a comprehensive internship scheme and direct wage benefits for new entrants in the formal sector.

Enhanced Standard Deduction

To further aid salaried employees, the standard deduction has been increased, which will effectively reduce their taxable income and provide more financial relief. This change is particularly beneficial for those opting for the new tax regime.

Key Takeaways for Salaried Employees and Job Seekers

1. Increased Standard Deduction

The standard deduction for salaried employees under the new income tax regime has been raised from ₹50,000 to ₹75,000. This move is designed to provide additional relief by lowering the taxable income, thereby increasing take-home pay.

2. Revised Income Tax Slabs

The new income tax slabs introduced in this budget are as follows:

• Up to ₹3 lakh: 0%
• ₹3 lakh to ₹7 lakh: 5%
• ₹7 lakh to ₹10 lakh: 10%
• ₹10 lakh to ₹12 lakh: 15%
• ₹12 lakh to ₹15 lakh: 20%
• Above ₹15 lakh: 30%

These revisions aim to make the tax system more equitable and provide significant savings for salaried employees, with potential tax savings of up to ₹17,500 annually.

3. Enhanced Family Pension Deduction

The deduction on family pensions has been increased from ₹15,000 to ₹25,000 under the new tax regime. This enhancement aims to provide better financial support to families reliant on pension income, benefiting around 4 crore individuals.

4. Direct Wage Benefit for New Entrants

The government will provide a one-month wage to all new employees entering the formal sector, capped at ₹15,000, through a direct benefit transfer. This initiative is designed to encourage formal employment and provide financial security to young workers.

5. Comprehensive Internship Scheme

A new internship scheme will be launched for youth, covering 10 million individuals over five years. Participants will gain valuable work experience in the top 500 companies, receiving a monthly allowance of ₹5,000 and a one-time assistance of ₹6,000. This initiative aims to enhance employability and bridge the gap between academic learning and industry requirements.

The Union Budget 2024-25 is a balanced approach to addressing the needs of various segments of the population while fostering economic growth. The emphasis on tax relief, employment generation, and skill development reflects the government’s commitment to creating a robust and inclusive economy. For salaried employees and job seekers, the budget offers substantial benefits that promise to improve their financial well-being and job prospects in the years to come.