New Income Tax Slab: Under the new tax regime, a tax of Rs 60,000 is payable on income of Rs 12 lakh or Rs 12.75 lakh (salaried class). But this entire amount is waived due to rebate under section 87A.
New Tax Regime: A day before the announcement of Budget 2025, Prime Minister Narendra Modi mentioned Maa Lakshmi and the very next day Finance Minister Nirmala Sitharaman gave a big relief to the taxpayers. The new tax regime announced in February introduced revised tax slabs and rates, due to which no tax will have to be paid on income up to Rs 12 lakh. For the salaried class, this limit will be Rs 12.75 lakh, because there will also be a standard deduction of Rs 75,000 for them. That is, a salaried person will not have to pay tax on income up to Rs 12.75 lakh.
Tax rebate of Rs 60,000 instead of Rs 25,000
However, it is important to note that there will be no exemption on income from Capital Gains. They will be taxed according to different short-term and long-term tax rates. Under this change, the tax rebate has been increased from Rs 25,000 to Rs 60,000. Under the new tax regime, a tax of Rs 60,000 is payable on income of Rs 12 lakh or Rs 12.75 lakh (salaried class). But this entire amount is waived due to the rebate available under Section 87A. That is, no tax will have to be paid on this income.
What if the income is more than Rs 12 lakh?
If your taxable income is even one rupee more than Rs 12 lakh, then you will not get the benefit of tax rebate and you will have to pay tax according to the new tax slab. However, the government has tried to benefit the salaried class by changing the tax slab. Under this, a standard deduction of Rs 75,000 has also been given, which will provide relief to all taxpayers.
New tax rates as per Budget 2025-26
>> No tax on income up to Rs 4,00,000
>> Rs 4,00,001 to Rs 8,00,000 5%
>> Rs 8,00,001 to Rs 12,00,000 10%
>> Rs 12,00,001 to Rs 16,00,000 15%
>> Rs 16,00,001 to Rs 20,00,000 20%
>> Rs 20,00,001 to Rs 24,00,000 25%
>> 30% on income above Rs 24,00,001
Benefit of tax saving, how much tax will be saved?
Your tax saving will be decided according to your income. The maximum benefit will be available on income of Rs 24 lakh. According to the old tax regime, tax of Rs 4.1 lakh was due on an income of Rs 24 lakh. In the new tax regime, it has been reduced to Rs 3 lakh. That is, those with an income of Rs 24 lakh will be able to save Rs 1.1 lakh. If your income is more than Rs 24 lakh, then the tax rates will remain at 30% and you will continue to get savings of Rs 1.1 lakh.
One crore people will get benefit
Earlier the limit for not paying any kind of tax was Rs 7 lakh. Now by increasing it to Rs 12 lakh, about one crore tax payers will get relief. Earlier, people who had to pay tax of Rs 20,000 to Rs 80,000, now their income will be completely tax free. However, due to this change, the government will lose revenue of Rs 1 lakh crore.
No change in old tax regime
If you select the old tax regime, which is chosen by people who avail home loan or HRA exemption, then there is no change in the tax rate. If your income is a little more than Rs 12 lakh, then the government has made a provision for marginal relief. Its purpose is to ensure that those earning more than Rs 12 lakh do not get less net income than those earning Rs 12 lakh. For example, if someone’s income is Rs 12.10 lakh, then according to the tax slab, his income tax is Rs 61,500. But with marginal relief, this taxpayer will have to pay a tax of only Rs 10,000. It is important to note that marginal relief is limited to an income of about Rs 12.75 lakh.
Most Read Articles:
- Standard deduction: What is standard deduction? How do salaried taxpayers benefit?
- Big update for taxpayers! Even if your income is up to 12 lakhs, you may still be taxed! You will not get any benefit in these cases
- Credit Card Link UPI: Link your credit card to UPI from home, know step-by-step guide
