Government Withdraws 2% Equalisation Levy and Announces Tax Reliefs in Budget 2024-25

The government has withdrawn the 2% equalisation levy, increased the standard deduction for salaried employees to Rs 75,000, and raised the deduction limit for employers’ NPS contribution to 14%. The tax deduction on family pensions was also increased to Rs 25,000, resulting in tax savings for salaried employees.

The government on Tuesday announced the withdrawal of the 2 per cent equalisation levy.

Presenting the Budget for 2024-25 in the Lok Sabha, Finance Minister Nirmala Sitharaman revealed that the standard deduction for salaried employees will be hiked to Rs 75,000 from Rs 50,000 under the new income tax regime in FY25.

Furthermore, the deduction limit for employers' contributions to the National Pension System (NPS) has been raised to 14% from 10%. Additionally, the tax deduction on family pensions for pensioners will be increased to Rs 25,000 from Rs 15,000. The finance minister noted that salaried employees under the new tax regime will save up to Rs 17,500 annually due to the changes proposed in the FY25 Budget.