Income tax relief: Budget 2024 may increase standard deduction limit to ₹1 lakh

The Finance Ministry is considering increasing the standard deduction limit under the new tax regime, as reported by CNBC Awaaz. This potential change could be part of Finance Minister Nirmala Sitharaman's upcoming budget for her third term, following consultations within government departments and the Prime Minister's Office. \r

\r

The standard deduction, a fixed amount reducing taxable income, is currently set at ₹50,000 for salaried individuals and pensioners under the new regime, a limit introduced in Budget 2023. Given rising living costs, experts suggest raising it to at least ₹1 lakh.\r

\r

Historically, the standard deduction was removed in 2004, reintroduced in 2018 at ₹40,000, and increased to ₹50,000 in 2019.