Union Budget 2025 has provided a giant relief for taxpayers. The government has revised the slabs and rates under the new regime to reduce taxes and leave taxpayers with more money in their hands. The government believes this will help domestic consumption and boost savings and investment.
In the new proposals, there will be no tax burden on up to Rs 12 lakh annual income while the revised slabs will benefit those earning more than that. The changes are part of the Budget presentation by Finance Minister Nirmala Sitharaman on Saturday.
Here’s a comprehensive view of how the new tax structure looks like in the backdrop of the existing slabs:
Announcing the budget, the Finance Minister said taxpayers with Rs 12 lakh annual income will get a benefit of Rs 80,000 and those earning Rs 18 lakh will get a benefit of Rs 70,000 under the new slabs. They will also enjoy the additional benefit of Rs 75,000 standard deduction.
To provide the tax relief, she said the centre will forego Rs 1 lakh crore revenue in direct taxes and Rs 2,600 crore based on tax proposals.
The government has also shared a breakdown of how the new slabs will benefit those earning up to Rs 25 lakh. The tax rate above Rs 24 lakh annual income is flat 30%.
While a salaried person earning up to Rs 12 lakh pays nothing, practically Rs 12.75 lakh adding the standard deduction. For those with Rs 13 lakh taxable income, it will be divided into four slabs: He will pay nothing on the first four lakhs, 5% on the next four lakhs: Rs 20,000, 10% on the succeeding four lakhs: Rs 40,000, and 15% on the remaining 1 lakh: Rs 15,000. This adds up to Rs 75,000.
In the existing structure, he will have to pay Rs 1 lakh, which means he will save Rs 25,000 under the new slabs.
There has been no announcement regarding the old regime, indicating that it remains the same. It also hints the government wants taxpayers to migrate to the new regime, if they haven’t already. The new regime offers lower rates than the old one but comes with lesser exemptions.
