New Delhi: In a major move to ease the tax burden on middle-class taxpayers, Finance Minister Nirmala Sitharaman on Saturday announced fresh tax slabs under the New Tax regime in the Union Budget 2025-26.
What’s New?
- Higher Exemption Limit: No tax on income up to ₹4 lakh, up from ₹3 lakh in the previous structure.
- Revised Tax Slabs: Progressive tax rates from 5% to 30% based on income brackets.
- Enhanced Rebate: Individuals earning up to ₹12 lakh (₹12.75 lakh for salaried) can avail tax benefits.
- Savings Across Income Brackets: ₹80,000 saved at ₹12 lakh income, ₹1.1 lakh saved at ₹25 lakh income.
- Capital Gains Excluded: The rebate applies to regular income, but capital gains will be taxed separately.
Old vs New Tax Slabs at a Glance
Income Range (₹ Lakh) | Old Regime | New Regime |
|---|---|---|
0 - 3 | No Tax | No Tax |
3 - 4 | 5% | No Tax |
4 - 8 | 5% | 5% |
8 - 10 | 20% | 10% |
10 - 12 | 30% | 10% |
12 - 16 | 30% | 15% |
16 - 20 | 30% | 20% |
20 - 24 | 30% | 25% |
Above 24 | 30% | 30% |
What This Means for You
- More Take-Home Pay: Higher exemption and lower tax rates mean more disposable income.
- Simplified Taxation: The new regime removes the need for multiple deductions, streamlining compliance.
- Middle-Class Benefits: Those earning up to ₹12 lakh pay zero tax due to rebate and lower rates.
The Bigger Picture
The government’s focus on reducing the tax burden on the middle class aligns with its broader economic agenda of increasing spending power and boosting financial stability. If approved by Parliament, the new regime will take effect from April 1, 2025.
Published: 01 Feb 2025, 02:48 pm IST
Disclaimer: Kindly avoid objectionable, derogatory, unlawful and lewd comments, while responding to reports. Such comments are punishable under cyber laws. Please keep away from personal attacks. The opinions expressed here are the personal opinions of readers and not that of Mathrubhumi.
