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No tax on income of up to ₹12 lakh | All your questions answered
Budget 2025: This limit will be ₹12.75 lakh for salaried tax payers counting ₹75,000 of standard deduction.
Budget 2025: In a major relief to the middle class in India, Union finance minister Nirmala Sitharaman on Saturday announced that no income tax will be payable on income up to ₹12 lakh. Follow LIVE updates here.
This limit will be ₹12.75 lakh rupees for salaried tax payers counting ₹75,000 of standard deduction. She also stated that the new income tax regime will be simpler, with a special focus on benefiting the middle class.
"I am now happy to announce that there will be no income tax payable up to income of ₹12 lakh (i.e. average income of ₹1 lakh per month other than special rate income such as capital gains) under the new regime," the finance minister said.
Also Read | New income tax slabs released in Budget for FY 2025-26 | Check full details
"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," Sitharaman added.
New income tax slabs announced: All your questions answered
What are the new slabs in the proposed new regime introduced by Finance Bill, 2025?
Here are the new tax slabs in the proposed new regime:
- ₹0 to ₹4 lakh: Nil
- ₹4 to ₹8 lakh: 5%
- ₹8 to ₹12 lakh: 10%
- ₹12 to ₹16 lakh: 15%
- ₹16 to ₹20 lakh: 20%
- ₹20 to ₹24 lakh: 25%
- Above 24 lakh: 30%
What is the maximum total income for which tax liability for individual taxpayers is NIl?
In the proposed new tax regime, the maximum total income for which tax liability for individual taxpayers is NIL is Rs. 12 lakhs.
The change in tax slabs is beneficial for which category of persons?
New tax regime is applicable to person, being an individual or Hindu undivided family or association of persons [other than a co-operative societysociety], or body of individuals, whether incorporated or not, or an arƟficial juridical person referred to in sub-clause (vii) of clause (31) of section 2. Accordingly, change in tax slabs will benefit all these persons.
How will a person who has an income ₹12 lac benefit from new rates?
Any individual earlier was required to pay a tax of ₹80,000 (in the new regime) for an income of Rs. 12 lacs. Now, he will be required to pay nil tax on such income.
Is the standard deduction on salary available in the new regime?
Yes, a standard deduction of Rs. 75,000 is available to a tax payer in the new regime. Therefore, a salaried tax payer will not be required to pay any tax where his income before standard deduction is less than or equal to ₹12,75,000.
Whether standard deduction is available in old regime?
Standard deduction of Rs. 50,000 is available in old regime
How much tax will be paid by a tax payer having income of ₹12,10,000? What is marginal relief?
The tax liability on such tax payer by way of slabs only is Rs. 61,500. How ever a person having ₹12 lac income pays nil tax. By providing marginal relief it has been ensured that the tax payable by a person having income marginally above ₹12 lacs is required to pay only marginal amount of tax equal to the amount of income above ₹12 lacs so that his carry home is also ₹12 lacs. In this case he will be required to pay a tax of ₹10,000.
What is the maximum amount of rebate available to any tax payer?
The maximum rebate available is ₹60,000 which is there for a tax payer having income of ₹12 lacs on which tax is payable as per the new slabs.
