• Notification Date: 05-02-2025
• Notification No: N/A

Budget 2025: Taxpayers May Save Up to Rs. 1.1 Lakh with New Income Tax Slabs

As a major relief measure for Indian taxpayers, Finance Minister Nirmala Sitharaman announced revised income tax slabs under the Budget 2025, which gives considerable tax relief to individuals with incomes up to Rs. 12 lakh. It is expected that the new structure of income tax will reduce liabilities and increase disposable income for middle-class taxpayers.

The rebate of Rs. 60,000 is the main feature of the new tax regime, through which income up to Rs. 12 lakh gets exempted. Therefore, income up to Rs. 12 lakh for an individual and up to Rs. 12.75 lakh for a salaried taxpayer would get zero tax liability altogether. This will result in having nil tax liability for around 1 crore of the assessees who otherwise had some amount of tax liability in the earlier range of between Rs. 20,000 and Rs. 80,000.

Also, peak tax saving for more than Rs. 12 lakh income taxpayers will now be at an income level of Rs. 24 lakh for a saving of Rs. 1.1 lakh. Taxes for individuals earning Rs. 24 lakh would be liability at an amount of Rs. 3 lakh. In the case of the old tax regime, it would be liable at an amount of Rs. 4.1 lakh. That difference is the tax saving worth Rs. 1.1 lakh. Tax rates are the same, 30% for income that has crossed Rs. 24 lakh.

Income above Rs. 12 lakh will have the following new tax slabs:
• Rs. 4 lakh: Exempt from taxation
• Rs. 4 lakh to Rs. 8 lakh: Tax, 5%
• Rs. 8 lakh to Rs. 12 lakh: Tax, 10%
• Rs. 12 lakh to Rs. 16 lakh: Tax, 15%
• Rs. 16 lakh to Rs. 20 lakh: Tax, 20%
• Rs. 20 lakh to Rs. 24 lakh: Tax, 25%
• Amount over Rs. 24 lakh: Tax, 30%

The marginal relief will also ensure that taxpayers earning just above Rs. 12 lakh will not face a higher tax burden than those earning exactly Rs. 12 lakh.

This Budget 2025 is likely to support the middle class substantially, reduce tax liability, and accelerate economic growth all for fair and efficient tax in the end.