In a giant announcement for India's middle class, the government uplifted the mood of taxpayers as Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, announced that there will be no income tax payable for income up to Rs 12 lakh. This comes as the biggest tax relief for the middle class since 1997.
The rebate goes up to Rs 12.75 lakh taking into account standard deductions, under the new tax regime, said the Finance Minister.
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The new tax regime, made the default tax regime by the government, provides for concessional tax rates and liberal slabs. However, this regime doesn't provide the deductions that are allowed under the old tax regime.
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Here's what effectively changes in your income tax based on the fresh announcement:
"The new tax structure would substantially reduce tax for the middle class," said the finance minister, while announcing the changes.
Earlier, the limit of income for 0 income tax payment was Rs 7 lakh. The government has said the increase in this limit will be benefitting around one crore assessees who were earlier required to pay tax varying from Rs 20,000 to Rs 80,000. They will now be paying nil tax.
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