Income Tax: We all have to give some part of our income to the government in the form of tax. But recently the government has made some changes in the tax rules. These changes are especially beneficial for those whose income is up to Rs 12 lakh. Now it will be easier to understand the tax limit a little more. Let’s know about these changes.
Benefits of the new tax system
This time in the budget 2025, the government has given a big gift to the middle class and salaried class people. The government has made some important changes in the tax slab, so that there is less impact on your pocket.
Now if your annual income is up to Rs 4 lakh, then you will not have to pay any tax. Then 5% tax will be levied on income from 4 lakh to 8 lakh. 10% tax will be levied on income from 8 lakh to 12 lakh, and in this way the tax rates will gradually increase. This means that if your income is up to 4 lakhs, you will not have to pay tax and even if it is up to 12 lakhs, the tax will be less.
Tax rebate will be available on 12 lakhs
Now, if your taxable income is Rs 12 lakh or less, then you will get a special relief. In this case, the government gives you full tax rebate, meaning whatever tax is made (Income Tax), it is canceled. This exemption is available under section 87A of the Income Tax Act.
Let us understand this with a simple calculation. If your income is Rs 12 lakh, then first you get standard deduction, which is Rs 75,000 for salaried people. Now, your taxable income becomes Rs 11,25,000.
Now, let’s calculate the tax on this Rs 11.25 lakh:
5% tax will be levied on Rs 4 lakh to Rs 8 lakh, which will be Rs 20,000.
10% tax will be levied on Rs 8 lakh to Rs 11.25 lakh, which will be Rs 32,500.
In this way, your total tax comes to Rs 52,500. But, since your income is up to Rs 12 lakh, the government gives you a tax rebate of up to Rs 60,000. This means, your entire tax will be waived off and you will not have to pay a single rupee in tax!
What is tax rebate
Tax rebate means that the government gives you tax exemption in certain cases. For example, if your income is up to Rs 12 lakh, then the government waives off some amount of tax (Income Tax). This time in the budget, the government has increased the limit of tax rebate to Rs 60,000. This means that if your income is Rs 12 lakh or less, then you can get a tax exemption of up to Rs 60,000.
The new tax system is going to be a big benefit especially for the middle class and salaried class people. Now if your income is up to Rs 12 lakh, you will get a tax rebate, which will make your tax liability zero. This change will not only give you financial relief, but it will also make it easier for you to pay tax.
If you are also included in the taxpayers (Income Tax), then these new changes have brought good news for you. Now less tax will be levied on your earnings, so that you will be able to use your salary in a better way.
Most Read Articles:
- EPFO: Good news for employees and account holders, change in rules, now you will get these benefits
- SBI New FD Rates : Big News! SBI cuts interest rates on Fixed Deposit, see what is the new interest rate now
- Credit Card Link UPI: Link your credit card to UPI from home, know step-by-step guide
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
