Union Budget 2025 Personal Tax Bonanza: No Income Tax For Those Earning Up to ₹12 Lakh

11 hours ago

In a major relief for taxpayers, Finance Minister Nirmala Sitharaman announced that individuals earning up to ₹12 lakh annually will now be exempt from paying income tax. This unprecedented move aims to boost disposable income, drive consumption, and provide financial relief to the middle class. The government also introduced revised tax slabs and additional deductions to further ease the tax burden. This landmark decision is expected to have a significant impact on salaried employees, small business owners, and self-employed professionals, reshaping India's tax landscape.

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Transcript

00:00I am now happy to announce that there will be no income tax payable up to income of 12 lakh rupees.

00:09So, average income of 1 lakh per month other than the special rate income such as capital

00:33gains under the new regime.

00:36This limit will be 12.75 lakh for salaried taxpayers due to the standard deduction of

00:4475,000.

00:45Slabs and rates are being changed across the board to benefit all taxpayers.

00:54The new structure will substantially reduce the taxes of the middle class and leave more

01:00money in their hands, boosting household consumption, savings and investment.

01:06In the new tax regime, I propose to revise tax rate structures as follows.

01:130 to 4 lakh rupees nil, 4 to 8 lakh rupees 5%, 8 to 12 lakh rupees 10%, 12 to 16 lakh

01:26rupees 15%, 16 to 20 lakh rupees 20%, 20 to 24 lakh rupees 25%, and above 24 lakh

01:35rupees 30%.

01:39To taxpayers up to 12 lakh of normal income other than special rate income such as capital

01:49gains, tax rebate is being provided in addition to the benefit due to slab rate reduction

02:05in such a manner that there is no tax payable by them.

02:10The total tax benefit of slab rate changes and rebate at different income levels can

02:17be illustrated with a few examples.

02:20A taxpayer in the new regime with an income of 12 lakh rupees will get a benefit of 80,000

02:28rupees in tax, which is 100% of tax payable as per the existing rates.

02:36A person having income of 18 lakh rupees will get a benefit of 70,000 rupees in tax, that

02:46is 30% of tax payable as per existing rates.

02:51A person with an income of 25 lakh gets a benefit of 1 lakh 10,000 rupees, that is 25%

02:59of his tax payable as per existing rates.

03:03Details of my tax proposals are given in the annexure.

Union Budget 2025 Personal Tax Bonanza: No Income Tax For Those Earning Up to ₹12 Lakh

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