Union Budget 2024: Here's step-by-step guide to pay zero tax on Rs 10 lakh income

The Union Budget for 2024-25 has just been announced during the Monsoon Session of Parliament, and it brings some exciting news for taxpayers. Presented by Finance Minister Nirmala Sitharaman, this budget not only continues her impressive streak of delivering record-breaking seven consecutive budgets but also introduces several changes that could benefit you. If you¡¯re wondering how to manage your income tax efficiently, particularly if your salary is Rs 10 lakh, this guide will show you how to potentially pay zero tax. By understanding the new provisions and using the right strategies, you can take full advantage of the tax-saving opportunities offered in the Union Budget 2024.

Key Updates in Union Budget 2024

The Union Budget 2024 highlighted driving economic growth and generating job opportunities. It includes important changes like increasing the standard deduction from Rs 50,000 to Rs 75,000 under the new tax regime. This increase is aimed at helping taxpayers save more on their income tax.

Also Read: Here's How You Can Download Form 16, 16A and 27D Online

Income Tax Changes Under Budget 2024

ET

According to the new tax rules, individuals with a salary up to Rs 7.75 lakh per year will not need to pay any income tax, as reported in ZeeNews. Even if your salary is more than this amount, you can still save on taxes. The standard deduction is a fixed amount deducted from your total salary before calculating income tax.

Please note that no changes have been made to the standard deduction under the old tax regime.

Also Read: Difference Between New And Old Tax Regime

How to Pay Zero Tax on a Rs 10 Lakh Income

If you earn Rs 10 lakh annually, you can avoid paying income tax by using the deductions available under the old tax regime. Here¡¯s a simple guide:

• Standard Deduction: Under the old tax regime, you can deduct Rs 50,000 from your total salary. A salary of Rs 10 lakh reduces your taxable income to Rs 9.50 lakh.
• Section 80C Investments: Investments in schemes like PPF, EPF, and NSC allow you to save up to Rs 1.5 lakh. Deducting this from Rs 9.50 lakh lowers your taxable income to Rs 8 lakh.
• NPS Contributions: By investing up to Rs 50,000 in the National Pension System (NPS), you get an additional tax break under Section 80CCD (1B). This reduces your taxable income to Rs 7.50 lakh.
• Home Loan Interest: You can claim up to Rs 2 lakh for home loan interest under Section 24B. After this deduction, your taxable income will be Rs 5.50 lakh.
• Medical Insurance: You can claim up to Rs 25,000 for individual health insurance under Section 80D. If your policy covers your family too, you can get an additional deduction of up to Rs 50,000. After these deductions, your taxable income will be Rs 4.75 lakh.

Remember, the deadline to file your Income Tax Return (ITR) for the financial year 2023-24 is July 31, 2024. Take advantage of these benefits to manage your taxes effectively.

By utilizing these deductions, you can reduce your taxable income from Rs 10 lakh to Rs 4.75 lakh, resulting in no tax liability, as there is no tax on income up to Rs 5 lakh under the old tax regime. Make sure to plan your investments and claim eligible deductions to maximize your tax savings according to the Union Budget 2024.