Budget 2025 New Income Tax Slabs: Exemption Up To Rs 12 Lakh Highest In Almost Two Decades

In a massive announcement for taxpayers as part of the Union Budget 2025, Finance Minister Nirmala Sitharaman on Saturday said that there will be no income tax payable up to the income of Rs 12 lakh. This exemption is the biggest relief for income tax payers in nearly 20 years.

The rebate goes up to Rs 12.75 lakh taking into account standard deductions, under the new tax regime, said the Finance Minister.

The table below shows the changes in the tax slabs:

The finance minister also said that the government will be introducing the new Income Tax Bill next week, a significant announcement for India's salaried class.

NDTV Profit, citing sources, had last month reported that the government was likely to propose the new I-T Bill to replace the decades old Income Tax Act, 1961.

The announcement comes as the Finance Minister, in her last Budget, had promised a comprehensive review of direct taxes.

Here are the key highlights on the direct tax front:

-No tax up to Rs 12 lakh

-New Income Tax Bill announced; the New Income Tax Bill will lead to lower litigation as it will be simple to understand

-The limit for tax deduction for senior citizens to be doubled to Rs 1 lakh

-The threshold to collect tax at source on remittances under LRS to be increased to Rs 10 lakh from Rs 7 lakh

-To rationalise TDS, TCS for simplicity

-The annual limit of Rs 2.4 lakh for TDS on rent is raised to Rs 6 lakh

-Delay for payment of TCS up to the due date to be decriminalised

-TCS on remittances if loan is taken for education waived

-Propose to extend the time limit to file the updated returns from 2 years to 4 years