The Union Budget 2025 has brought great relief to individual taxpayers, especially the middle class, with an important overhaul of income tax structure.
Finance Minister Nirmala Sitarman in her budget speech, amended and announced the new income tax slab under the government, ensuring that persons earning up to ₹ 12 lakh will not have to pay any income tax. The move is expected to increase more disposable income in the hands of taxpayers, increase consumption and economic growth.
What are the revised income tax slabs for FY 2025-26 under the new tax regime?
The government has launched the tax slab for individuals, Hindu undivided families (HUFS), and unions of individuals under the new tax regime. Below is the tax structure:
Income tax slab under new rule (FY 2025-26)
| Total Income (₹) | Taxes without marginal relief (₹) | Derved with marginal relief (₹) |
|---|---|---|
| 12,10,000 | 61,500 | 10,000 |
| 12,50,000 | 67,500 | 50,000 |
| 12,70,000 | 70,500 | 70,000 |
| 12,75,000 | 71,250 | 71,250 (no marginal relief) |
2. For which tax liability is the maximum total income zero?
Under the new tax regime, persons with income up to ₹ 12 lakh will not have to pay any tax. For salaried taxpayers, threshold, extends up to 12.75 lakhs, considering a standard deduction of 75,000.
3. What steps are required to take advantage of zero tax liability?
The new tax governance is the default regime. To avail the benefit of NIL tax liability, taxpayers only need to record their income tax returns (ITR) – not required additional steps.
4. Who will benefit from the change in tax slab?
New tax regime applies:
- Individuals
- Hindu undivided family (HUFS)
- Union of individuals (except cooperative societies)
- Body of individuals
- Artificial judicial person
- All taxpayers under these categories will be revised and benefited from slabs and rates.
| Total Income (₹) | Taxes according to current rates (₹) | Taxes as per proposed rates (₹) | Rate/Slab Change Benefits (₹) | Rebate profit (₹) | Total profit (₹) |
|---|---|---|---|---|---|
| 8,00,000 | 30,000 | 20,000 | 10,000 | 20,000 | 30,000 |
| 9,00,000 | 40,000 | 30,000 | 10,000 | 30,000 | 40,000 |
| 10,00,000 | 50,000 | 40,000 | 10,000 | 40,000 | 50,000 |
| 11,00,000 | 65,000 | 50,000 | 15,000 | 50,000 | 65,000 |
| 12,00,000 | 80,000 | 60,000 | 20,000 | 60,000 | 80,000 |
| 13,00,000 | 1,00,000 | 75,000 | 25,000 | 0 | 25,000 |
| 14,00,000 | 1,20,000 | 90,000 | 30,000 | 0 | 30,000 |
| 15,00,000 | 1,40,000 | 1,05,000 | 35,000 | 0 | 35,000 |
| 16,00,000 | 1,70,000 | 1,20,000 | 50,000 | 0 | 50,000 |
| 17,00,000 | 2,00,000 | 1,40,000 | 60,000 | 0 | 60,000 |
| 18,00,000 | 2,30,000 | 1,60,000 | 70,000 | 0 | 70,000 |
| 19,00,000 | 2,60,000 | 1,80,000 | 80,000 | 0 | 80,000 |
| 20,00,000 | 2,90,000 | 2,00,000 | 90,000 | 0 | 90,000 |
| 21,00,000 | 3,20,000 | 2,25,000 | 95,000 | 0 | 95,000 |
| 22,00,000 | 3,50,000 | 2,50,000 | 1,00,000 | 0 | 1,00,000 |
| 23,00,000 | 3,80,000 | 2,75,000 | 1,05,000 | 0 | 1,05,000 |
| 24,00,000 | 4,10,000 | 3,00,000 | 1,10,000 | 0 | 1,10,000 |
| 25,00,000 | 4,40,000 | 3,30,000 | 1,10,000 | 0 | 1,10,000 |
5. How much tax was made by paying ₹ 12 lakh first, and how much has been done now?
Earlier, under the new tax regime, ₹ 12 lakh was required to pay ₹ 80,000 in income tax. With the latest changes, this tax liability has been reduced to NIL.
6. How much extra money will be saved to taxpayers due to these changes?
The government estimates that due to the revised slab and exemption adjustment, about ₹ 1 lakh crore will remain in the hands of taxpayers.
7. What is marginal relief, and how does it work?
Marginal relief ensures that taxpayers with a slightly higher income of ₹ 12 lakhs do not pay excessive tax compared to 12 lakh or below.
Income tax with marginal relief
| Total Income (₹) | Taxes without marginal relief (₹) | Dayable with marginal relief (₹) |
|---|---|---|
| 12,10,000 | 61,500 | 10,000 |
| 12,50,000 | 67,500 | 50,000 |
| 12,70,000 | 70,500 | 70,000 |
| 12,75,000 | 71,250 | 71,250 (no marginal relief) |
If a taxpayer earns 12,10,000, they will usually pay ₹ 61,500 in tax. However, under marginal relief, they will pay only ₹ 10,000, ensuring that their net income remained close to 12 lakhs.
8. What is the maximum discount available for taxpayers?
The available maximum discount is 60,000, which is applicable to taxpayers, which earns up to ₹ 12 lakhs.
9. What was the earlier limit for Nil Tax Payment?
Earlier, Nil Tax Threshold. It was 7 lakhs. This budget has increased the limit of 12 lakhs, benefiting 1 crore taxpayers.
10. Is standard cuts available under the new regime?
Yes, a standard deduction of ₹ 75,000 is available in the new tax regime. In the old tax regime, standard deduction. Was 50,000.
11. How many taxpayers will benefit from these new slabs?
About 8.75 crore persons have filed ITRS for Ay 2024-25. A large part of these taxpayers will benefit from the revised rates and the Nil tax threshold will increase.
12. Does rebate apply to capital gains, lottery win, or special rate income?
No, tax does not apply to other income at special rates under the rebate capital gains, lottery win, or special rates under the Income Tax Act. This only applies to slab-based income under Section 115BAC.
13. What is the difference between discount and marginal relief?
Rebate: A deduction from tax that eliminates tax liability for people earning to 12 lakhs.
Marginal relief: There is a provision to ensure taxpayers that the to -earnings of ₹ 12 lakhs or below do not pay higher taxes than to 12 lakhs.
(Tagstotransite) Income Tax (T) Budget 2025 (T) Personal Income Tax (T) Budget Tax Declaration (T) Income Tax Slab (T) No Income Tax
