Big tax relief for middle class: No income tax for earnings up to Rs 12 lakh

New Delhi: In a major boost for the Indian middle class, Finance Minister Nirmala Sitharaman on Saturday announced that there will be no income tax payable for incomes up to Rs 12 lakh, and Rs 12.75 lakh for salaried taxpayers, including the standard deduction. Presenting the Union Budget 2025-26 in Parliament, she highlighted that the new tax structure would substantially reduce the tax burden on the middle class.

Revised income tax slabs

The revised tax rates under the new regime are as follows:

• Rs 0 - 4,00,000: Nil
• Rs 4,00,001 - 8,00,000: 5%
• Rs 8,00,001 - 12,00,000: 10%
• Rs 12,00,001 - 16,00,000: 15%
• Rs 16,00,001 - 20,00,000: 20%
• Rs 20,00,001 - 24,00,000: 25%
• Above Rs 24,00,000: 30%

Tax rebate benefits at different income levels

Taxpayers earning up to Rs 12 lakh will benefit from a full tax rebate, ensuring no tax liability. This rebate, coupled with the revised slab rates, results in significant tax savings across various income brackets:

• A taxpayer earning Rs 12 lakh in the new regime saves Rs 80,000, which is 100% of the tax payable under the previous rates.
• A taxpayer earning Rs 18 lakh receives a benefit of Rs 70,000, covering 30% of their earlier tax liability.
• A taxpayer with Rs 25 lakh in income gains Rs 1,10,000, reducing their tax burden by 25%.

The Budget Session of Parliament commenced on Friday and will take place in two phases. The first phase, from January 31 to February 13, will be followed by the second phase from March 10 to April