Budget 2025: New Income Tax Slabs and Exemptions Explained

Union Budget 2025: Revised Income Tax Slabs Announced

New Tax Structure Revealed by Finance Minister

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, brings significant changes to the income tax structure, aiming to provide relief to the middle class. The revised tax slabs were announced on Saturday, February 1, 2025. These changes introduce a new framework for income tax calculation, impacting a wide range of taxpayers.

Detailed Breakdown of the New Tax Slabs

Here’s a closer look at the newly announced income tax slabs:

• No Tax: For annual income up to ₹4 lakh, no income tax will be applicable.
• 5% Tax: A 5% tax rate will be levied on incomes between ₹4 lakh and ₹8 lakh per annum.
• 10% Tax: Incomes ranging from ₹8 lakh to ₹12 lakh will be taxed at a rate of 10%.
• 15% Tax: For income between ₹12 lakh and ₹16 lakh, a 15% tax will apply.
• 20% Tax: Incomes between ₹16 lakh and ₹20 lakh will be taxed at 20%.
• 25% Tax: A 25% tax rate is set for income falling in the range of ₹20 lakh to ₹24 lakh.
• 30% Tax: The highest tax rate of 30% will be applicable for incomes exceeding ₹24 lakh annually.

Tax Exemption Under New Tax Regime

Notably, individuals with an annual income of up to ₹12 lakh will not be subject to income tax under the new tax regime. This exemption increases to ₹12.75 lakh for salaried taxpayers who avail a standard deduction of ₹75,000.

Impact on Taxpayers

These revisions are intended to streamline the tax process and provide financial relief to taxpayers across various income brackets. The implementation of these new slabs will significantly impact the tax liabilities of a considerable portion of the Indian population. It is important for all individuals to understand how the new tax structure applies to their specific income and plan their finances accordingly.

The government's goal is to make the tax system more progressive and transparent, while also encouraging greater compliance.

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Categories: Income tax slabs, tax exemptions, Union Budget 2025