Budget 2025: No Income Tax on Salaries Up to ₹12 Lakh – Big Relief for the Middle Class
In a major announcement, Finance Minister Nirmala Sitharaman has raised the income tax exemption limit, providing significant relief to the middle class. Under the new tax structure, individuals earning up to ₹12 lakh per year will not have to pay any income tax. This move aims to increase disposable income, boost spending, and drive economic growth.
Contents
New Income Tax Slabs (2025)
The revised tax slabs under the new tax regime are as follows:
| Income Range | Tax Rate |
| ₹0 – ₹4 lakh | Nil |
| ₹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% |
Additionally, salaried employees will benefit from a ₹75,000 standard deduction, making the effective tax-free limit ₹12.75 lakh per year.
How Much Tax You Save:-
| Income | Current Tax (₹) | New Tax (₹) | Savings (₹) | Rebate Benefit (₹) | Total Benefit (₹) | Final Tax Payable (₹) |
|---|---|---|---|---|---|---|
| ₹8 Lakh | ₹30,000 | ₹20,000 | ₹10,000 | ₹20,000 | ₹30,000 | ₹0 |
| ₹9 Lakh | ₹40,000 | ₹30,000 | ₹10,000 | ₹30,000 | ₹40,000 | ₹0 |
| ₹10 Lakh | ₹50,000 | ₹40,000 | ₹10,000 | ₹40,000 | ₹50,000 | ₹0 |
| ₹11 Lakh | ₹65,000 | ₹50,000 | ₹15,000 | ₹50,000 | ₹65,000 | ₹0 |
| ₹12 Lakh | ₹80,000 | ₹60,000 | ₹20,000 | ₹60,000 | ₹80,000 | ₹0 |
| ₹16 Lakh | ₹1,70,000 | ₹1,20,000 | ₹50,000 | ₹0 | ₹50,000 | ₹1,20,000 |
| ₹20 Lakh | ₹2,90,000 | ₹2,00,000 | ₹90,000 | ₹0 | ₹90,000 | ₹2,00,000 |
| ₹24 Lakh | ₹4,10,000 | ₹3,00,000 | ₹1,10,000 | ₹0 | ₹1,10,000 | ₹3,00,000 |
| ₹50 Lakh | ₹11,90,000 | ₹10,80,000 | ₹1,10,000 | ₹0 | ₹1,10,000 | ₹10,80,000 |
Key Takeaways:
- No Tax on Income up to ₹12 Lakh – Thanks to tax reductions and rebates.
- Major Tax Savings – People earning ₹16 Lakh & above also save significantly.
- Higher Income, Lower Tax Burden – Even those earning ₹50 Lakh save ₹1.1 Lakh.
Impact on the Economy
The government expects that reducing taxes will increase household savings, boost spending and investments, and ultimately strengthen economic growth.
Final Thoughts
This new tax structure is a big win for the middle class, as it reduces tax burdens while promoting financial stability. With more money available for spending and saving, the Indian economy is expected to grow stronger in the coming years.
Disclaimer: The information provided is for general guidance only and not tax or financial advice. Tax rules may change, and individual cases vary. Please consult a tax professional for accurate advice.
