New tax regime: Finance Minister Nirmala Sitharaman gave relief to middle class taxpayers in her 8th budget. He has changed the tax slab under the new tax regime, which is making it difficult for many people to understand how much they will benefit. Let us know what are in the new tax slab and what will be right for you.
What are the new tax slabs?
According to the new tax regime in budget 2025, now there will be no tax on income up to Rs 4 lakh.
5% tax on income of Rs 4 to 8 lakh
10% tax on 8 to 12 lakh rupees
15% on 12 to 16 lakh rupees
20% on 16 to 20 lakh rupees
25% on 20 to 24 lakh rupees
30% tax will be levied on income above 24 lakhs.
Zero tax limit has been increased from 3 lakh to 4 lakhs as compared to earlier. The income limit of every tax bracket has also been reduced to more, so that more people can benefit.
How will you get a tax exemption on income up to Rs 12 lakh?
The government has decided to give tax exemption to those with income up to Rs 12 lakh. The salaried people will also get a standard deduction of Rs 75,000, which will reduce the total taxable income. For example, there will be a tax exemption of up to Rs 80,000 on income of Rs 12 lakh.
If your salary is 16 lakh rupees then how will tax be levied?
Up to 4 lakhs – no tax
5% = 20,000 on 4-8 lakhs
10% = 40,000 rupees at 8-12 lakhs
15% = 60,000 rupees at 12-16 lakhs
Total tax = Rs 1,20,000
This will be about Rs 50,000 less than the current tax.
If your salary is 50 lakh rupees then how much tax?
Under the new regime, an income of Rs 50 lakh will now have to pay a tax of Rs 10.8 lakh. This is 1.1 lakh less than the old tax system.
Old Tax Regies or New – What to choose?
If you can claim more discounts in the old tax system (eg HRA, 80C, home loan etc.), it can be beneficial for you. For example, if you claim a rebate of Rs 4 lakh on an income of Rs 16 lakh, then you will have to pay a tax of Rs 1,77,500 in the old regime, while in the new regime, you will have to pay only Rs 1,20,000 tax. In such a situation, the new tax regime can prove to be better for you.