Union Budget 2025: New tax regime changes, check revised slabs here

In a big relief to the middle class, Finance Minister Nirmala Sitharaman has extended the exemption limit for salaried taxpayers to Rs 12.75 lakh, with a standard deduction of Rs 75,000. Presenting the Union Budget 2025, the minister announced fresh tax slabs under the new tax regime, under which, there is no tax on annual incomes up to Rs 4 lakh. The new tax regime will come into effect from the new financial year 2025-26, starting on April 1, 2025.

FM Sitharaman said that after the changes made under the new tax regime, there will be a saving of Rs 80,000 on an income of Rs 12 lakh, Rs 70,000 on an income of Rs 18 lakh, and Rs 1,10,000 on an income of Rs 25 lakh.

For income between Rs 4 lakh and Rs 8 lakh, the tax rate will be 5 per cent, while incomes between Rs 8 lakh and Rs 12 lakh will be taxed at 10 per cent. For higher income brackets, the tax rates will increase progressively, with 15 per cent for Rs 12 lakh to Rs 16 lakh, 20 per cent for Rs 16 lakh to Rs 20 lakh, 25 per cent for Rs 20 lakh to Rs 24 lakh, and 30 per cent for incomes above Rs 24 lakh. Check the full tax slab here:

NO INCOME TAX ON ANNUAL INCOME UPTO Rs. 12 LAKH UNDER NEW TAX REGIME

 Limit to be Rs. 12.75 lakh for salaried taxpayers, with a standard deduction of Rs. 75,000

 Union Budget 2025-26 brings across-the-board change in Income Tax Slabs and rates to benefit all tax-payers

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— PIB India (@PIB_India) February 1, 2025

In addition to the revised tax slabs, Finance Minister Sitharaman also announced an increase in the tax rebate available under Section 87A. This means that individuals with a net taxable income of up to Rs 12 lakh will not be required to pay any income tax.

However, if your annual income is exactly Rs 12 lakh, you will still pay tax according to the applicable slab rates but will benefit from the rebate, reducing your final tax liability.
In simpler terms, if you're a salaried individual or earn other types of "regular income" up to Rs 12 lakh, you will not have to pay any tax due to both the enhanced rebate and the revised tax slabs. However, income from capital gains will not be eligible for the rebate and will be taxed separately under different rules.

(With inputs from IANS)