Income Tax Slabs | Budget 2025: PM Modi says tax rebate will provide big benefit to middle class

Income tax slabs live: People watch the presentation of Union Budget 2025-26 on television screens at a showroom, in Gurugram, Saturday, Feb. 1, 2025.

Income Tax Slabs | Budget 2025: In a major announcement, Union finance minister Nirmala Sitharaman on Saturday said that under the new tax regime, there will be zero income tax up to an annual income of ₹12 Lakh. The announcement was made by the finance minister during the Budget speech in the Lok Sabha. Nirmala Sitharaman said that the slabs and rates are being changed across the board to benefit all tax-payers.

“New structure to substantially reduce taxes of middle class and leave more money in their hands, boosting household consumption, savings and investment,” the finance minister announced in the Parliament.

Sitharaman also said that the government will be introducing a new Income Tax (I-T) bill in Parliament next week.

At the moment, taxpayers can choose between two tax systems: The old tax regime, which allows exemptions on housing rentals and insurance, and the new tax regime, which was introduced in 2020 and offers slightly lower rates but doesn't allow major exemptions.

Salaried taxpayers are free to choose either regime when they file their returns but for those with income from business or profession, the new regime was set as the default regime from FY 2023-24.

Here's what the revised tax slabs under the new tax regime will look like:

• ₹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%

Income Tax Budget 2025 Live: How to calculate income tax?

You can calculate your income tax using the Tax Calculator on the Income Tax Department's official website. Here are the steps you should follow:

Step 1: Go to the e-filing home page.

Step 2: You need to Select Quick Links and choose tax calculator.

Step 3: Click the link to go to the Income and Tax Calculator page. There are two options: Basic Calculator and Advanced Calculator. The Basic Calculator tab is selected by default.

Step 4: In the Basic Calculator tab, you need to enter the details like the Assessment Year, taxpayer category, age, residential status, total annual income and total deductions. The tax calculation will appear in the Tax Summary section, according to the details you entered.

Step 5: In the Advanced Calculator tab, you need to enter more details, including Preferred tax regime, AY, taxpayer category, age, residential status, due date and actual date of submission of return.

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