Income Tax Budget 2025: The Union Budget 2025 has introduced significant changes to the income tax structure, providing substantial relief to middle-class taxpayers. Under the new regime, individuals earning up to Rs 12 lakh annually will not be liable to pay any income tax 2025. For salaried taxpayers, the inclusion of a standard deduction of Rs 75,000 effectively raises this tax-exempt income limit to Rs 12.75 lakh “New Income Tax Slabs 2025”. This move aims to reduce the tax burden on the middle class, thereby enhancing disposable income and stimulating economic growth.
Income Tax Budget 2025 – Revised New Income Tax Slabs 2025
- Income up to Rs 4 lakh: No tax
- Income from Rs 4 lakh to Rs 8 lakh: 5%
- Income from Rs 8 lakh to Rs 12 lakh: 10%
- Income from Rs 12 lakh to Rs 16 lakh: 15%
- Income from Rs 16 lakh to Rs 20 lakh: 20%
- Income from Rs 20 lakh to Rs 24 lakh: 25%
- Income above Rs 24 lakh: 30%
Income Tax Budget 2025: These adjustments reflect the government’s ongoing commitment to supporting the middle class. In previous years, the ‘nil tax’ slab was progressively increased—from Rs 2.5 lakh in 2014 to Rs 5 lakh in 2019, and further to Rs 7 lakh in 2023. The current enhancement to Rs 12 lakh underscores this continued effort to alleviate the tax burden on middle-income groups.
Income Tax Budget 2025: Illustrative Tax Benefits
- For an income of Rs 12 lakh: The taxpayer saves Rs 80,000, which is the entire tax payable under the previous rates.
- For an income of Rs 18 lakh: The taxpayer benefits from a tax reduction of Rs 70,000, equating to 30% of the tax payable under the earlier rates.
- For an income of Rs 25 lakh: The individual enjoys a tax saving of Rs 1,10,000, amounting to 25% of the tax payable as per the previous structure.
Income Tax Budget 2025 These reforms are anticipated to leave more money in the hands of taxpayers, thereby boosting household consumption, savings, and investment. The government’s strategy aligns with its broader economic objectives, emphasizing the importance of the middle class in driving demand and contributing to the nation’s development.
New Income Tax Slabs 2025: In summary, the Income Tax Budget introduces a more progressive tax structure, with no tax liability for incomes up to Rs 12.75 lakh for salaried individuals. This initiative not only provides immediate financial relief to a significant segment of the population but also aims to foster economic growth through increased consumer spending and investment.
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Why This Change?
The government has taken this step to provide financial relief to the middle class and boost economic growth. The three pillars of Democracy, Demography, and Demand play a crucial role in making India a developed nation (Viksit Bharat). By reducing tax liabilities, the government aims to enhance household savings, encourage spending, and promote investments.