Finance Minister Nirmala Sitharaman presented her eighth consecutive budget on Saturday and announced some massive changes for the upcoming fiscal year. The Budget 2025 enhanced the tax free limit for salaried individual, with the intent to provide relief to the middle-class taxpayers in the country. No changes have been announced for the old tax regime.
Further, Sitharaman also announced revisions in the tax slabs under the new income tax regime. Let's take a look at the proposed new income tax regime with the tax slabs.
Proposed Changes In New Income Tax Regime
| Total Income (Rs) | Tax Rate (%) |
| 0-4 Lakh | Nil |
| 4-8 Lakh | 5% |
| 8-12 Lakh | 10% |
| 12-16 Lakh | 15% |
| 16-20 Lakh | 20% |
| 20-24 Lakh | 25% |
| Above 24 Lakh | 30% |
No Tax On Income Up To Rs 12 Lakh
Sitharaman also informed that taxpayers with income up to Rs 12 lakh will not have to pay any tax. However, this rebate is only applicable on basic income, excluding special income such as capital gains. The minister said, "I am now happy to announce that there will be no income tax payable upto income of ` 12 lakh (i.e. average income of ` 1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be ` 12.75 lakh for salaried tax payers, due to standard deduction of ` 75,000." Further, the minister informed that marginal relief will also be provided as per the earlier new tax regime and will be applicable for income marginally higher than Rs 12 lakh.
How Much Tax Will You Save In The New Income Tax Regime (Revised)?
According to the government, these are some of the examples of how your tax liabilities will be calculated in the proposed new income tax regime.
| Income | Tax On Slabs (Present) | Tax On Slabs (Proposed) | Benefit Of Rate/Slab | Rebate Benefit (Full up to Rs 12 Lakh) | Total Benefit | Tax After Rebate Benefit |
| 8 Lakh | Rs 30,000 | Rs 20,000 | Rs 10,000 | Rs 20,000 | Rs 30,000 | 0 |
| 9 Lakh | Rs 40,000 | Rs 30,000 | Rs 10,000 | Rs 30,000 | Rs 40,000 | 0 |
| 10 Lakh | Rs 50,000 | Rs 40,000 | Rs 10,000 | Rs 40,000 | Rs 50,000 | 0 |
| 11 Lakh | Rs 65,000 | Rs 50,000 | Rs 15,000 | Rs 50,000 | Rs 65,000 | 0 |
| 12 Lakh | Rs 80,000 | Rs 60,000 | Rs 20,000 | Rs 60,000 | Rs 80,000 | 0 |
| 16 Lakh | Rs 1,70,000 | Rs 1,20,000 | Rs 50,000 | 0 | Rs 50,000 | Rs 1,20,000 |
| 20 Lakh | Rs 2,90,000 | Rs 2,00,000 | Rs 90,000 | 0 | Rs 90,000 | Rs 2,00,000 |
| 24 Lakh | Rs 4,10,000 | Rs 3,00,000 | Rs 1,10,000 | 0 | Rs 1,10,000 | Rs 3,00,000 |
| 50 Lakh | Rs 11,90,000 | Rs 10,80,000 | Rs 1,10,000 | 0 | Rs 1,10,000 | Rs 10,80,000 |
Also Read : Happy With Income Tax Announcements In Budget 2025? Here's How Much It Will Cost Centre
More Tax Revisions
Additionally, the Budget 2025 also increased the tax deduction limit on interest for senior citizens by double from Rs 50,000 to Rs 1 lakh. The annual TDS limit on rent has also been hiked from Rs 2.40 lakh to Rs 6 lakh. The limit for collecting tax at source (TCS) on remittances under RBI's Liberalised Remittance Scheme (LRS) has been hiked from Rs 7 lakh to Rs 10 lakh. The Finance Minister also suggested removing TCS on remittances for education purposes, where such remittance is out of a loan taken from a specified financial institution.
Adhil Shetty, CEO, BankBazaar.com, noted that the changes in the tax regime keep in line with inflation. "Under the proposed 2025 tax regime, someone earning Rs 25 lakh annually will pay Rs 3.43 lakh in total tax, compared to Rs 4.57 lakh under the 2024 regime. This translates to 5 per cent more money in hand and a monthly saving of around Rs 9,500 — a substantial relief for taxpayers. This rationalisation of income tax has been long-awaited and will go a long way in reaffirming the confidence of the people in the economy. More cash in hand will also mean increased spending, which will drive higher consumption and, in turn, will fuel economic growth," he said.