No income tax on annual income up to Rs. 12 lakh

Union Budget 2025-26 brings across-the-board change in IT slabs and rates to benefit all taxpayers

GN Bureau | February 1, 2025


#Nirmala Sitharaman   #Finance Minister   #Union Budget   #Income Tax  
Union minister for finance and corporate affairs Nirmala Sitharaman along with the MoS Finance Pankaj Chaudhary as well as ministry officials ahead of the budget presentation on Saturday
Union minister for finance and corporate affairs Nirmala Sitharaman along with the MoS Finance Pankaj Chaudhary as well as ministry officials ahead of the budget presentation on Saturday

Reaffirming the government’s commitment to the philosophy of “trust first, scrutinize later”, the Union Budget 2025-26 has reposed faith in the middle class and continued the trend of giving relief in tax burden to the common taxpayer. Presenting the Budget in the Parliament on Saturday, union minister for finance and corporate affairs Nirmala Sitharaman proposed an across-the-board change in tax slabs and rates to benefit all tax-payers.

Giving the good news to taxpayers, the finance minister stated, “There will be no income tax payable up to income of Rs. 12 lakh (i.e., average income of Rs.1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs. 12.75 lakh for salaried tax payers, due to standard deduction of Rs. 75,000.”  Tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them, she added.

Sitharaman stated, “The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment.” In the new tax regime, the finance minister proposed to revise tax rate structure as follows:

0-4 lakh rupees: Nil

4-8 lakh rupees: 5 per cent

8-12 lakh rupees: 10 per cent

12-16 lakh rupees: 15 per cent

16-20 lakh rupees: 20 per cent

20- 24 lakh rupees: 25 per cent

Above 24 lakh rupees: 30 per cent

The total tax benefit of slab rate changes and rebate at different income levels can be illustrated in the table below:


While underlining Taxation Reforms as one of key reforms to realize the vision of Viksit Bharat, Sitharaman stated that the new income-tax bill will carry forward the spirit of ‘Nyaya’. The new regime will be simple to understand for taxpayers and tax administration, leading to tax certainty and reduced litigation, she informed.

Quoting Verse 542 from The Thirukkural, the finance minister stated, “Just as living beings live expecting rains, Citizens live expecting good governance.” Reforms are a means to achieve good governance for the people and economy. Providing good governance primarily involves being responsive. The tax proposals detail just how the government under the guidance of prime minister Narendra Modi has taken steps to understand and address the needs voiced by our citizens, Sitharaman added.

Comments

 

Other News

Development paradox: Falling poverty miracle and an inequality problem

India’s reduction in poverty over the past decade is a development achievement of considerable significance. The World Bank’s April 2026 ‘India Development Update’ estimates that the share of Indians living below the international extreme-poverty line of $3.00 per person per day i

In Arunachal, a river we call mother

In Arunachal Pradesh, the Siang is not just a river. For many of us, especially the Adi people, it is part of our family. Our grandparents fished in it. Children learned to swim in it. Our farms drink from it. When someone says a huge dam will be built on it, we do not hear the word "project".

A new retelling of the Mahabharata delves into key moments

In a time when every decision carries consequences and questions of ambition, power, loyalty, identity and moral choice continue to shape our lives, Dr. Arun Krishnan’s new book, ‘Mahakshana’ (Penguin India) offers a strikingly relevant retelling of the Mahabharata.  

Cabinet approves viability gap funding to develop grid-scale energy storage systems

The Union Cabinet, chaired by PM Narendra Modi, has approved the Viability Gap Funding (VGF) Scheme for Development of Grid-Scale Energy Storage Systems, with a total financial support of Rs.14,500 crore for the period FY 2026-27 to FY 2030-31. The scheme aims to support the development o

Cabinet creates a pathway to absorb Agniveers in Defence Forces

An objective assessment in terms of organisational requirements and operational efficiency has brought out the outstanding performance of Agniveers in terms of skills, motivation levels, physical fitness and technological prowess. As envisaged earlier, based on merit, 25% of Agniveers will be offered reg

Modi inaugurates, lays foundation stone of Pune Metro projects

Prime minister Narendra Modi inaugurated and laid the foundation stone for Pune Metro projects worth around ₹21,800 crore on Tuesday through video conferencing. Addressing the gathering on the occasion, the PM extended warm Diwali greetings to the people of Pune and Maharashtra and remarked that f

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter