The Union Budget 2025 has alleviated a large taxpayer in India’s taxpayers. Finance Minister Nirmala Sitharaman has announced that individuals who earn up to 120,000 rupees per year do not need to pay income tax under the revised AY 2025-26 revised tax. This movement aims to provide a large economic relief to the middle class and promote consumption and savings.
AY 2025-26 revised income tax slab (new tax system)
The government simplified the tax system and reduced the burden on middle -income earners. This is the latest tax slab:
| Income range (LS in LAKH) | tax rate(%) |
|---|---|
| RS 0 -RS 4 LAKH | nil |
| RS 4 LAKH -RS 8 LAKH | 5 % |
| RS 8 LAKH -RS 12 LAKH | 10 % |
| RS 12 LAKH -RS 16 LAKH | 15 % |
| RS 16 LAKH -RS 20 LAKH | 20 % |
| RS 20 LAKH -RS 24 LAKH | twenty five% |
| 240,000 or more | 30 % |
Important highlights:
- Zero tax on income up to RS 12 LAKH (Including deductions based on various sections).
- Taxpayers who earn up to RS 25 LAKH Receive up to 11,000 lupplements.
- Limitability of individuals that slightly exceed the RS 12 LAKH limit.
- High -income groups were gradually taxed to up to 30 %.
Understand new tax benefits
The new tax system offers simplified slabs, but tax exemption from people who earn up to 12 rupees is required to use deductions in various sections.
- Section 80ccC: Exemption of RS 1.5 LAKH for investing in a specific pension fund.
- Mortgage interest deduction: Exemption of RS 1.5 LAKH for interest paid for mortgages.
Finance Minister Citalaman revealed: “It is guaranteed that taxpayers will not be paid by additional rebates for taxpayers up to 12 rupees (excluding capital gain and special tax rate income).”
Comparison with previous tax system
New tax system (AY 2024-25)
| Revenue slab (RS) | tax rate(%) |
| Up to 3,00,000 | 0 % |
| 3,00,001-7,00,000 | 5 % |
| 7,00,001-10,00,000 | 10 % |
| 10,00,001 -12,00,000 | 15 % |
| 12,00,001-15,00,000 | 20 % |
| Over 15,00,000 | 30 % |
Old tax system (AY 2024-25)
| Revenue slab (RS) | tax rate(%) |
|---|---|
| Up to 2,50,000 | 0 % |
| 2,50,001-5,00,000 | 5 % |
| 5,00,001-10,00,000 | 20 % |
| Over 10,00,000 | 30 % |
Under the old tax system, deductions based on sections 80C, 80D, and 80TTA are still available, and are useful for individuals with large investment and expenses.
Selection of old tax system and new tax system
Since April 1, 2023 New tax system is set as default optionsBut individuals can still choose the old administration. An important difference lies in the availability of deductions.
- New tax system: The tax rate is low, but the deduction is reduced.
- Old tax system: It is a higher tax rate, but multiple deductions (80C, 80D, HRA, etc.).
Additional charges: Older tax system
New tax system
| Income range (RS) | Additional charges ( %) |
|---|---|
| Up to 500 million rupees | nil |
| 50 Rark -1 Crawl | 10 % |
| 1 crawl -2 crawl | 15 % |
| 2 trillion or more | twenty five% |
Old tax system
| Income range (RS) | Additional charges ( %) |
|---|---|
| Up to 500 million rupees | nil |
| 50 Rark -1 Crawl | 10 % |
| 1 crawl -2 crawl | 15 % |
| 2 Crawl -5 Crawl | twenty five% |
| 5 trillion or more | 37 % |
New income tax slab: How to check the reduction of income tax in 2 minutes?
How this budget is useful for the middle class
Government decision Raise the tax exemption to 120,000 lpies It is under the new system Great victory for individuals with salary。 This movement is as follows.
- Promote household savings By reducing tax obligations.
- Increase disposable income For the middle class.
- Encourage investment and economic growth By reducing the tax burden.
Final thoughts
The Union Budget 2025 has been introduced One of the most important tax reforms in recent years。 and Zero tax on income up to RS 12 LAKHA Simplified tax systemand 25 Profit of people who earn income up to rupees,, The middle class is standing to get the most。 However, taxpayers need to carefully evaluate whether they are: New tax system or Old tax system Before submitting a return, it’s perfect for them.
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