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New Delhi, February 01, 2025: There will be no income tax payable upto income of Rs 12 lakh under the new regime, presenting the Budget in Parliament today Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said.
This limit will be Rs.12.75 lakh for salaried tax payers, due to standard deduction of Rs. 75,000, The Finance Minister said.
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.
Presenting the Budget Sitharaman proposed an across-the-board change in tax slabs and rates to benefit all tax-payers.
Giving the good news to tax payers, the Finance Minister stated,
“There will be no income tax payable upto income of Rs. 12 lakh (that is 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 said, “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.
