Budget 2025 Income Tax: Finance Minister Nirmala Sitharaman made a mega announcement in Budget 2025, stating that people earning up to Rs 12 lakh per annum will not be required to pay any income tax under the new tax regime. The move offers a much-needed relief to India's middle class.
The finance minister stated that salaried individuals will pay no tax on incomes up to Rs 12.75 lakh per annum, thanks to a standard deduction of Rs 75,000 under the new tax regime.
While no changes have been made to the old tax regime, the FM stated that she will introduce a New Income Tax Bill in Parliament next week. The new law, she said, would be "simple to understand" and also lead to lower tax litigation.
New Income Tax Slabs
Under the updated slabs of the new tax regime, earnings of up to Rs 4 lakh will attract no tax. For annual income between Rs 4 lakh to Rs 8 lakh, a 5% tax will be applicable whereas those earning Rs 8 lakh to 12 lakh, will have to pay income tax at the rate of 10%. Annual earnings between Rs 12 lakh to Rs 16 lakh will be taxed at 15%. The highest rate is 30%, applicable for incomes above Rs 24 lakh.
Here are the revised tax slabs under the new tax regime:
Up to Rs 4,00,000: Nil
Rs 4,00,001 to Rs 8,00,000: 5%
Rs 8,00,001 to Rs 12,00,000: 10%
Rs 12,00,001 to Rs 16,00,000: 15%
Rs 16,00,001 to Rs 20,00,000: 20%
Rs 20,00,001 to Rs 24,00,000: 25%
Above Rs 24,00,000: 30%
How Much Money Can You Save?
Those choosing to pay their income taxes under the new tax regime and have an income ranging from Rs 8 lakh to Rs 15 lakh will make benefits up to Rs 80,000.
For an income of Rs 8 lakh, the existing tax rate is Rs 30,000. Under the new slabs, the tax benefit will be Rs 30,000, resulting in no income tax.
People with earnings of Rs 12 lakh will benefit the most, getting a tax exemption of Rs 80,000. Earlier, they had to pay Rs 80,000 as tax, which will now be nil.
Here is how people with incomes between Rs 8 lakh and Rs 15 lakh will benefit from the new income tax slabs announcement.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
