Image Source : PIXABAY Slabs and rates being changed across the board to benefit all tax-payers.
Finance Minister Nirmala Sitharaman on Saturday delivered a significant relief to middle-class taxpayers by making annual income of up to Rs 12 lakh in the new tax regime tax-free.
Key Points
– Slabs and rates being changed across the board to benefit all tax-payers
– New structure to substantially reduce taxes of middle class and leave more money in their hands, boosting household consumption, savings and investment
– ‘Nil tax’ slab up to ₹12.00 lakh (₹12.75 lakh for salaried tax payers with standard deduction of ₹75,000)
Key Highlights of Budget 2025-26
https://getapi.indiatvnews.com/doc/highlights-of-budget-2025-26.pdf
The new tax regime will be:
Zero to Rs 4,00,000— No Tax
Rs 4,00,000 to Rs 8,00,000 – 5 per cent
Rs 8,00,0001 to Rs 12,00,000 – 10 per cent
Rs 12,00,001 to 16 lakh rupees – 15 per cent
Rs 16,00,001 to 20 lakh rupees – 20 per cent
Rs 20,00,001 to 24 lakh rupees – 25 per cent
Above 24 lakh – 30 per cent
New and Old Regime before this announcement
The new tax regime exempts income up to Rs 3 lakh. Those earning annually between Rs 3-7 lakh pay 5 per cent tax, Rs 7-10 lakh (10 per cent), Rs 10-12 lakh (15 per cent), Rs 12-15 lakh (20 per cent) and above Rs 15 lakh (30 per cent).
The old tax regime, however, exempts income up to Rs 2.5 lakh from taxes. Income from Rs 2.5-5 lakh attracts 5 per cent tax, and 20 per cent for income between Rs 5 lakh and Rs 10 lakh. A 30 per cent tax is levied on income above Rs 10 lakh.
Meanwhile, Finance Minister Nirmala Sitharaman said the government will introduce a new Income Tax bill next week to take forward the “trust first, scrutinise later” concept.
In another major reform move, the minister announced that the Foreign Direct Investment (FDI) in the insurance sector will be increased to 100 per cent from 74 per cent.
Presenting the Budget for 2025-26, Sitharaman said that over the past 10 years, the government has implemented several reforms for the convenience of taxpayers, including faceless assessment.
Sitharaman also mentioned the government coming out with taxpayers’ charter, faster returns process and almost 99 per cent of the income returns being on self-assessment.
