Budget 2025: No tax till Rs 12 lakh income; check revised tax slabs announced by FM Sitharaman

Under the present regime, no income tax is payable up to the income of Rs 12.75 lakh for salaried taxpayers due to the standard deduction of Rs 75000, said Finance Minister Nirmala Sitharaman.

"No Income Tax payable up to an income of Rs 12 lakh. Slabs and rates being changed across the board to benefit all tax-payers," announced FM Nirmala Sitharaman.

She further said, "...I propose to revise tax rate structures as follows: 0 to Rs 4 Lakhs - nil, Rs 4 Lakhs to Rs 8 Lakhs - 5%, Rs 8 Lakhs to Rs 12 Lakhs - 10%, Rs  12 Lakhs to Rs 16 Lakhs - 15%, Rs 16 Lakhs to Rs 20 Lakhs - 20%, Rs 20 Lakhs to Rs 24 Lakhs - 25% and above Rs 24 Lakhs - 30%. To taxpayers up to Rs 12 Lakhs of normal income other than special rate income  such as capital gains, tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them..."

Slabs and rates are being changed to benefit all taxpayers. The new structure will substantially reduce the taxes of the middle class, and leave more money in their hands, boosting household consumptions, savings and investments, she said.

In the new tax regime, the proposed revised tax rate structures are as follows:

1. O to Rs 4L – Nil
2. Rs 4L to Rs 8L – 5%
3. Rs 8L to 12L – 10%
4. Rs 12L to 16L – 15%
5. RS 16L to 20L – 20%
6. Rs 20L to 24L – 20% 
7. Above 24L – 30%

"The new tax structure would substantially reduce tax for the middle class," announced FM Sitharaman. Listen to what she said:

#WATCH | "No Income Tax payable up to an income of Rs 12 Lakh. Slabs and rates being changed across the board to benefit all tax-payers," announces FM Nirmala Sitharaman.

She further says, "...I propose to revise tax rate structures as follows: 0 to Rs 4 Lakhs - nil, Rs 4 Lakhs… pic.twitter.com/EgThN9IKSH

— OTV (@otvnews) February 1, 2025

Presenting the Union Budget 2025-26, FM Sitharaman said that the tax deduction at source (TDS) rates will be rationalised and the limit for tax deduction for senior citizens will be doubled to Rs 1 lakh.

FM Sitharaman also proposed to extend the time limit to file the updated return from two years to four years.

The threshold to collect TDS on remittances under the Liberalised Remittance Scheme (LRS) would be increased to Rs 10 lakh from Rs 7 lakh and an annual limit of Rs 2.4 lakh for TDS on rent has been raised to Rs 6 lakh.

Delay for payment of TCS up to the due date would be decriminalised, according to the Finance Minister, adding that TCS on remittances, if a loan was taken for education, has been waived.

The Union Budget also proposes to exempt withdrawals from National Savings Scheme (NSS) accounts on or after August 2024 from tax.

The Budget Session of Parliament, which commenced on Friday, will be conducted in two phases - the first started on January 31 and will conclude on February 13, while the second phase will begin on March 10 and end on April 4.

(With inputs from agencies)