The Union FM is currently presenting the budget for the fiscal year 2025-26.
The FM made a major announcement in the budget. The FM announced that the government has expanded the income tax exemption from the current Rs 7 lakh to the new Rs 12 lakh.
This would mean that taxpayers earning up to Rs 12 lakh annually will not have to any taxes.
The FM also announced a set the new tax slabs under the overhaul that has been brought to fore. The FM said that her government's trust in the taxpayers has increased.
Zero Income Tax till ₹12 Lakh Income under New Tax Regime
— Ministry of Finance (@FinMinIndia) February 1, 2025
Slabs and rates 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… pic.twitter.com/KfQy4a6PGd
The new slabs are as follows.
0-4 lakh - 0
4-8 lakh - 5 per cent
8 - 12 lakh - 10 per cent
12-16 lakh- 15 per cent
16 -20 lakh- 20 per cent
20 -25 lakh - 25 per cent
24 lakh - 30 per cent
Here, the taxpayers earning up to Rs 12 lakh will not be laible to pay any taxes, as they will be able to use the tax rebate under the section 87A of the income tax act, 1961.
The previous taxation system had two regimes. The new and the old regime.