Income Tax Budget 2025: Finance Minister Nirmala Sitharaman has made a big announcement on income tax in the budget. No income tax will be levied on income up to Rs 12 lakh annually. This is considered to be the biggest gift in the budget for middle class. Finance Minister Nirmala Sitharaman has given this exemption under the new income tax regime. Under the new announcements, people who have a monthly salary up to Rs 1 lakh, now they did not have to pay any income tax on their income.
Nirmala Sitharaman also said that the new income tax regime will be simple, in which special attention will be paid to benefiting the middle class. Along with this, Finance Minister Nirmala Sitharaman also informed about the change in income tax slab. These changes
He said that changes are being made at all levels in the slab and rates of income tax. Under these new changes, after the special rebate, now there will be tax on income up to Rs 12 lakh. At the same time, a person with annual income of up to Rs 25 lakh will get a tax exemption of up to Rs 1.1 lakh as compared to earlier. The financial burden on the middle class will be reduced and consumption will be promoted.
Income tax slab under new tax regime
The Finance Minister announced a change in income tax slab under the new tax regime. Now tax on income from 0 to 4 lakh rupees will be zero. At the same time, income of Rs 4 to 8 lakh will be taxed at the rate of 5%. Whereas the income tax rate on income ranging from Rs 8 to 12 lakh will be 10%. However, after the special rebate, tax will be zero for people with annual income up to Rs 12 lakh.
| Income tax slabs (₹) | Tax rate (%) |
| Up to 4 lakhs | 0% |
| 4 lakh to 8 lakhs | 5% |
| 8 lakh to 12 lakhs | 10% |
| 12 lakh to 16 lakhs | 15% |
| 16 lakh to 20 lakhs | 20% |
| 20 lakh to 24 lakhs | 25% |
| Above 24 lakhs | 30% |
What is the tax slab right now under the new tax regime?
The central government has made the new tax regime a default tax system from 1 April 2023. The current rates of income tax slab are below under the new tax regime.
| Income tax slabs (₹) | Tax rate (%) |
| Up to Rs 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% |
| Above 15,00,000 | 30% |
*Those with annual income of up to Rs 7 lakh get a special rebate of Rs 25,000 under the Income Tax Regime, due to which they do not have to pay any tax on their income.
Income tax slab under old tax regime
The government has not made any changes to the Income Tax Slab under the old tax regime. There are different tax rates for general taxpayers and senior citizens under the old tax regime. You can see them below-
Slab rates for taxpayers below 60 years of age
| Income tax slabs (₹) | Tax rate , |
| Up to Rs 2,50,000 | 0% |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
Slab rate for senior citizens (60-80 years)
| Income tax slabs () | Tax rate , |
| Up to Rs 3,00,000 | 0% |
| 3,00,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
Slab rate for 80+ years (80+ years)
| Income tax slabs () | Tax rate , |
| Up to Rs 5,00,000 | 0% |
| 5,00,001 – 10,00,000 | 20% |
| Above Rs 10,00,000 | 30% |
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