GG News Bureau
New Delhi, 1st Feb. The Union Budget 2025 has brought significant tax relief for individual taxpayers, with the government revising income tax slabs under the new regime. The move aims to reduce the tax burden, boost disposable income, and drive domestic consumption and investment.
Finance Minister Nirmala Sitharaman, in her Budget speech on Saturday, announced that individuals earning up to ₹12 lakh annually will not have to pay any income tax. The revised slabs also provide relief to those earning beyond this threshold. As per the new structure, taxpayers with ₹12 lakh annual income will benefit by ₹80,000, while those earning ₹18 lakh will save ₹70,000. Additionally, a standard deduction of ₹75,000 will apply.
To facilitate this tax relief, the Centre will forgo ₹1 lakh crore in direct tax revenue and ₹2,600 crore from other tax proposals. The new tax regime has a simplified structure, with the highest tax rate of 30% applicable on incomes above ₹24 lakh.
For instance, under the new regime, an individual with ₹13 lakh taxable income will pay:
- No tax on the first ₹4 lakh
- 5% on the next ₹4 lakh (₹20,000)
- 10% on the subsequent ₹4 lakh (₹40,000)
- 15% on the remaining ₹1 lakh (₹15,000)
This sums up to ₹75,000, compared to ₹1 lakh under the existing system, leading to a saving of ₹25,000.
The government has not made any changes to the old tax regime, signaling its intent to encourage more taxpayers to shift to the new system, which offers lower rates but fewer exemptions.
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