NEW DELHI, Feb 1 (Agencies): Individuals earning up to Rs 12 lakh annually will not have to pay any income tax under the new tax regime as Finance Minister Nirmala Sitharaman on Saturday gave relief to middle class by raising exemption limit and rejigging slabs.
For salaried employees, this nil tax limit will be Rs 12.75 lakh per annum, after taking into account a standard deduction of Rs 75,000.
Higher exemptions and rejigs have been effected under the new income tax regime.
“I am now happy to announce that there will be no income tax payable up to income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime,” the finance minister said.
“The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment,” Sitharaman said in her Budget speech.
As per the rejig, for people earning more than Rs 12 lakh per annum, there will be nil tax for income up to Rs 4 lakh, 5 per cent for income between Rs 4 and 8 lakh, 10 per cent for Rs 8-12 lakh, 15 per cent for Rs 12-16 lakh.
A 20 per cent income tax will be levied on income between Rs 16 and 20 lakh, 25 per cent on Rs 20-24 lakh and 30 per cent above Rs 24 lakh per annum.
A tax payer in the new regime with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax. A person having income of Rs 18 lakh will get a benefit of Rs 70,000 in tax.
A person with an income of Rs 25 lakh gets a benefit of Rs 1.10 lakh.
SUMMARY OF UNION BUDGET 2025-26
– NO INCOME TAX ON AVERAGE MONTHLY INCOME OF UPTO RS 1 LAKH; TO BOOST MIDDLE CLASS HOUSEHOLD SAVINGS & CONSUMPTION
– SALARIED CLASS TO PAY NIL INCOME TAX UPTO ₹ 12.75 LAKH PER ANNUM IN NEW TAX REGIME
– UNION BUDGET RECOGNISES 4 ENGINES OF DEVELOPMENT – AGRICULTURE, MSME, INVESTMENT AND EXPORTS
– BENEFITTING 1.7 CRORE FARMERS, ‘PRIME MINISTER DHAN-DHAANYA KRISHI YOJANA’ TO COVER 100 LOW AGRICULTURAL PRODUCTIVITY DISTRICTS
– “MISSION FOR AATMANIRBHARTA IN PULSES” WITH A SPECIAL FOCUS ON TUR, URAD AND MASOOR TO BE LAUNCHED
– LOANS UPTO Rs. 5 LAKHS THROUGH KCC UNDER MODIFIED INTEREST SUBVENTION SCHEME
– FY-25 ESTIMATED TO END WITH FISCAL DEFICIT OF 4.8%, TARGET TO BRING IT DOWN TO 4.4% IN FY-26
– SIGNIFICANT ENHANCEMENT OF CREDIT WITH GUARANTEE COVER TO MSMEs FROM ₹ 5 CR TO ₹ 10 CR
– A NATIONAL MANUFACTURING MISSION COVERING SMALL, MEDIUM AND LARGE INDUSTRIES FOR FURTHERING “MAKE IN INDIA”
– 50,000 ATAL TINKERING LABS IN GOVERNMENT SCHOOLS IN NEXT 5 YEARS
– CENTRE OF EXCELLENCE IN ARTIFICIAL INTELLIGENCE FOR EDUCATION, WITH A TOTAL OUTLAY OF ₹ 500 CRORE
– PM SVANIDHI WITH ENHANCED LOANS FROM BANKS, AND UPI LINKED CREDIT CARDS WITH ₹ 30,000 LIMIT
– GIG WORKERS TO GET IDENTITY CARDS, REGISTRATION ON E-SHRAM PORTAL & HEALTHCARE UNDER PM JAN AROGYA YOJANA
– ₹ 1 LAKH CRORE URBAN CHALLENGE FUND FOR ‘CITIES AS GROWTH HUBS’
– NUCLEAR ENERGY MISSION FOR R&D OF SMALL MODULAR REACTORS WITH AN OUTLAY OF ₹ 20,000 CRORE
– MODIFIED UDAN SCHEME TO ENHANCE REGIONAL CONNECTIVITY TO 120 NEW DESTINATIONS
– ₹ 15,000 CRORE SWAMIH FUND TO BE ESTABLISHED FOR EXPEDITIOUS COMPLETION OF ANOTHER 1 LAKH STRESSED HOUSING UNITS
– ₹ 20,000 CRORE ALLOCATED FOR PRIVATE SECTOR DRIVEN RESEARCH DEVELOPMENT AND INNOVATION INITIATIVES
– GYAN BHARATAM MISSION FOR SURVEYAND CONSERVATION OF MANUSCRIPTS TO COVER MORE THAN ONE CRORE MANUSCRIPTS
– FDI LIMIT ENHANCED FOR INSURANCE FROM 74 TO 100 PER CENT
– JAN VISHWAS BILL 2.0 TO BE INTRODUCED FOR DECRIMINALISING MORE THAN 100 PROVISIONS IN VARIOUS LAWS
– UPDATED INCOME TAX RETURNS TIME LIMIT INCREASED FROM TWO TO FOUR YEARS
– DELAY IN TCS PAYMENT DECRIMINALISED
– TDS ON RENT INCREASED FROM ₹ 2.4 LAKH TO ₹ 6 LAKH
– BCD EXEMPTED ON 36 LIFESAVING DRUGS AND MEDICINES FOR TREATING CANCER, RARE AND CHRONIC DISEASES
– BCD ON IFPD INCREASED TO 20% AND ON OPEN CELLS REDUCED TO 5%
– BCD ON PARTS OF OPEN CELLS EXEMPTED TO PROMOTE DOMESTIC MANUFACTURING
– TO BOOST BATTERY PRODUCTION, ADDITIONAL CAPITAL GOODS FOR EV AND MOBILE BATTERY MANUFACTURING EXEMPTED
– BCD EXEMPTED FOR 10 YEARS ON RAW MATERIALS & COMPONENTS USED FOR SHIP BUILDING
– BCD REDUCED FROM 30% TO 5% ON FROZEN FISH PASTE AND 15% TO 5% ON FISH HYDROLYSATE.