Many big announcements were made in Budget 2025 giving relief to the middle class, which included changes in tax slabs, TDS, tax rebate and other things. At the same time, a new Income Tax Bill was proposed in place of the old Income Tax Act 1961.
In Budget 2025, many big announcements were made to provide relief to the middle class, which included changes in tax slabs, TDS, tax rebate and other things. At the same time, a new Income Tax Bill was proposed in place of the old Income Tax Act 1961. All these changes are going to come into effect from April 1, 2025, for which only a few days are left now. This amendment by the government is to simplify the tax structure, increase consumption and give economic boost.
New Tax Slab
Under the new system, individuals earning up to Rs 12 lakh annually will be exempted from paying tax. Apart from this, salaried employees will be eligible for a standard deduction of Rs 75,000. This means that salary income up to Rs 12.75 lakh can now be exempted from tax. However, this exemption applies only to those who choose the new tax option. On the other hand, if it is more than this, tax will have to be paid as per the new tax slab. Which is as follows…
- Nil up to ₹4 lakh
- ₹4 Lakh – ₹8 Lakh 5%
- ₹8 Lakh – ₹12 Lakh 10%
- ₹12 lakh – ₹16 lakh 15%
- ₹16 lakh – ₹20 lakh 20%
- ₹20 lakh – ₹24 lakh 25%
- Above ₹24 lakh 30%
Tax rebate under section 87A
The biggest change is that the exemption under section 87A for taxpayers opting for the new tax regime has been increased from Rs 25,000 to Rs 60,000 earlier. This increase in tax rebate means that individuals earning up to Rs 12 lakh will have no tax liability under this regime, thereby increasing the limit of tax-free income.
