No Income Tax For Those Earning Up to ₹12 Lakh, New Revised Tax Slabs Announced

The Union FM is currently presenting the budget for the fiscal year 2025-26.

The FM made a major announcement in the budget. The FM announced that the government has expanded the income tax exemption from the current Rs 7 lakh to the new Rs 12 lakh.

This would mean that taxpayers earning up to Rs 12 lakh annually will not have to pay any taxes.

The FM also announced a set the new tax slabs under the overhaul that has been brought to the fore. The FM said that her government's trust in the taxpayers has increased.

The new slabs are as follows.

0-4 lakh - 0

4-8 lakh - 5 per cent

8 - 12 lakh - 10 per cent

12-16 lakh- 15 per cent

16 -20 lakh- 20 per cent

20 -25 lakh - 25 per cent

24 lakh - 30 per cent

Here, the taxpayers earning up to Rs 12 lakh will not be laible to pay any taxes, as they will be able to use the tax rebate under section 87A of the income tax act, 1961.

The previous taxation system had two regimes. The new and the old regime.

Old Regime

In the Old Regime, citizens opting for the scheme with an income of Up to Rs 2,50,000 are not liable to pay taxes, ie no need to pay any tax. Thereafter, taxpayers with income in the range of Rs 2,50,001 - Rs.3,00,000 have to pay 5 per cent.

The income slab of Rs 3,00,001 - Rs 5,00,000 has a 5 per cent income tax.

Here, due to the tax rebate under 87a of the income tax act, individuals earning up to Rs 5,00,000 are not liable to pay taxes.

Furthermore, the income slab of Rs 5,00,001 to Rs 10,00,000 pays 20 per cent. And, in the last slab of Rs 10,00,001 and above, taxpayers are subjected to 30 per cent.

New Regime

Similarly, in the New Regime, citizens with an income of Up to Rs 3 lakh pay no taxes. Furthermore, taxpayers who earning between Rs 7 lakh pay 5 per cent, as a result of the Rebate u/s 87A available under the IT act, citizens earning up to Rs 7 lakh are not liable to pay tax.

Rs 7 lakh - Rs 10 lakh pay 10 per cent, Rs 10 lakh - Rs 12 lakh will pay 15 per cent, Rs 12 lakh - Rs 15 lakh are liable to pay 20 per cent and people earning above Rs 15 lakh pay 30 per cent.

Published on: Saturday, February 01, 2025, 12:38 PM IST