Budget 2024: Government may hike exemption limit under new income tax regime to ₹5 lakh, says report

The Indian government is reportedly contemplating a reduction in certain personal income tax rates, aiming to enhance disposable income for individuals, particularly those in lower income brackets. \r

As per officials quoted by Moneycontrol, the upcoming budget, anticipated in mid-July, may raise the income threshold before taxes kick in from ₹3 lakh to ₹5 lakh, applicable under the new tax regime. This regime offers lower tax rates but requires forfeiting most deductions and exemptions available in the existing structure. \r

However, the government is unlikely to lower the highest income tax rate of 30 percent for those earning over ₹15 lakh annually, despite industry requests. The focus remains on stimulating consumption among lower-income groups rather than adjusting rates for higher income brackets or increasing spending on subsidies.