5 income tax relief measures announced by Nirmala Sitharaman in Budget 2025

Finance Minister Nirmala Sitharaman has announced a slew of measures which can significantly benefit taxpayers in the Union Budget 2025

Published on: Feb 1, 2025, 14:35:50 IST

By HT News Desk

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Finance Minister Nirmala Sitharaman has announced a slew of measures which can significantly benefit taxpayers in the Union Budget 2025, which she presented in the parliament on Saturday, February 1, 2025.

Union Finance Minister Nirmala Sitharaman with Union Minister of State for Finance Pankaj Chaudhary and other officials outside the Finance Ministry ahead of the presentation of the Union Budget 2025-26, in New Delhi, Saturday, Feb. 1, 2025. (PTI)

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5 income tax relief measures in Budget 2025

1) No income tax for up to ₹ ₹12 lakh per annum

The most prominent tax relief measure in the Budget 2025 is the exemption of income tax for all those earning up to ₹12 lakh annually.

2) New tax slabs

The Budget 2025 introduces new tax slabs. Sitharaman said, “I propose to revise tax rate structures as follows: 0 to ₹4 Lakhs - nil, ₹4 Lakhs to ₹8 Lakhs - 5%, ₹8 Lakhs to ₹12 Lakhs - 10%, ₹12 Lakhs to ₹16 Lakhs - 15%, ₹16 Lakhs to ₹20 Lakhs - 20%, ₹20 Lakhs to ₹24 Lakhs - 25% and above ₹24 Lakhs - 30%.”

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3) Tax benefits

A tax payer in the new regime with an income of ₹12 lakh will get a benefit of ₹80,000 in tax. A person with income of ₹18 lakh will get a benefit of ₹70,000 in tax, and a person with an income of ₹25 lakh gets a benefit of ₹1.10 lakh.

4) Standard deduction

Under the new tax regime, salaried employees as well as pensioners get a standard deduction of ₹75,000, which raises the tax-free income limit to ₹12.75 lakh for salaried individuals, considering the revised ₹12 lakh nil-tax threshold announced in the budget.

However, for those opting for the old tax regime, the standard deduction remains unchanged at ₹50,000. The old regime does still continue to offer additional exemptions and deductions, especially those under Section 80C ( ₹1.5 lakh), Section 80D (health insurance), as well as HRA benefits.

Also Read: Union Budget: Import taxes cut in boost for electronics production

5) Rationalised TDS

The government also proposed to increase the annual threshold for tax deduction at source (TDS) on rent to ₹6 lakh from the current limit of ₹2.4 lakh.

This will reduce the number of transactions which are liable to TDS and benefit small taxpayers receiving small payments.

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HT News Desk
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