In the Budget 2025, Finance Minister Nirmala Sitharaman announced revised income tax slabs under the new regime, providing significant relief to middle-class taxpayers. The changes, effective from FY25-26, will ensure that individuals earning up to Rs 12 lakh annually will pay no tax, except for special income, with an aim to boost disposable income and economic growth.

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• No tax for incomes up to Rs 12 lakh annually under the new regime.
• Taxpayers with up to Rs 12.75 lakh annual income can claim zero tax after standard deduction of Rs 75,000.
• Proposed new tax slabs:
  • Up to Rs 4 Lakh: Nil
  • Rs 4-8 Lakh: 5%
  • Rs 8-12 Lakh: 10%
  • Rs 12-16 Lakh: 15%
  • Rs 16-20 Lakh: 20%
  • Rs 20-24 Lakh: 25%
  • Above Rs 24 Lakh: 30%
• Current tax slabs:
  • Up to Rs 3 Lakh: Nil
  • Rs 3-7 Lakh: 5%
  • Rs 7-10 Lakh: 10%
  • Rs 10-12 Lakh: 15%
  • Rs 12-15 Lakh: 20%
  • Above Rs 15 Lakh: 30%
• Taxpayers earning Rs 12 lakh will save Rs 80,000 annually, while those earning Rs 18 lakh will save Rs 70,000.
• The new structure aims to leave more money in the hands of the middle class, boosting consumption, savings, and investment.
• The government will forgo Rs 1 lakh crore in direct tax revenue due to these changes.
• The reforms aim to recognize and contribute to the growth of the middle class in national development.