Budget 2025 income tax slab changes 2025-2026 defined: In a giant cheer for the salaried center class taxpayers, FM Nirmala Sitharaman introduced sweeping changes to the income tax slabs and income tax charges under the new income tax regime for FY 2025-26. FM Nirmala Sitharaman additionally introduced that she will be tabling the New Income Tax Bill in Parliament subsequent week.
All income tax slabs and charge changes have been introduced under the new income tax regime – and the most important takeaway is that a person incomes Rs 12 lakh will have to now pay NIL or ZERO tax under the new regime.So, if you’re a salaried taxpayer with income up to Rs 12.75 lakh, then together with the Rs 75,000 customary deduction, your income tax outgo will be 0!
“Right after 2014, the ‘Nil tax’ slab was raised to Rs 2.5 lakh, which was further raised to Rs 5 lakh in 2019 and to Rs 7 lakh in 2023. This is reflective of our Government’s trust on the middle-class tax payers. 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. This limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000,” FM Nirmala Sitharaman introduced in her Budget speech.
FM Sitharaman went on to clarify:
- A tax payer within the new regime with an income of Rs 12 lakh will get a benefit of Rs 80,000 in tax (which is 100% of tax payable as per current charges).
- An individual having income of Rs 18 lakh will get a benefit of Rs 70,000 in tax (30% of tax payable as per current charges).
- An individual with an income of Rs 25 lakh will get a benefit of Rs 1,10,000 (25% of his tax payable as per current charges).
Also Read | New vs outdated income tax regime after Budget 2025: Post income tax slab changes, which tax regime is healthier for salaried center class taxpayers?
If you’re confused about how a lot income tax you will save put up Budget 2025 changes in income tax slabs under the new tax regime, we clarify additional:
Income Tax Slab Changes FY 2025-26: How a lot tax will you save at varied salary levels?
- At a complete taxable income of Rs 7 lakh, there is no such thing as a extra benefit since under the sooner regime as nicely there was a tax rebate accessible up to Rs 7 lakh income
- At a complete taxable income of Rs 10 lakh, there may be an income tax benefit or saving of Rs 52,000/- together with cess. The whole income tax outgo will be NIL due to the rebate
- At a complete taxable income of Rs 12 lakh, there may be an income tax benefit or saving of Rs 83,200/- together with cess. The whole income tax outgo will be NIL due to the rebate
- At a complete taxable income of Rs 20 lakh, there may be an income tax benefit or saving of Rs 93,600/- together with cess.
- At a complete taxable income of Rs 27 lakh, there may be an income tax benefit or saving of Rs 114,400/- together with cess.
- At a complete taxable income of Rs 55 lakh, there may be an income tax benefit or saving of Rs 125,840/- together with surcharge and cess.
- At a complete taxable income of Rs 1.25 crore, there may be an income tax benefit or saving of Rs 131,560/- together with surcharge and cess.
- At a complete taxable income of Rs 2.5 crore, there may be an income tax benefit or saving of Rs 143,000/- together with surcharge and cess.
“The Government has revamped the tax slabs and rates under the new tax regime in an effort to make it more attractive and widen its adoption by taxpayers. Individuals who are already being taxed under the new tax regime definitely stand to gain from the proposed changes in the tax rates, for instance, an individual having taxable income of Rs 27 lakhs will now save Rs 114,400 in taxes (including cess) under the proposed new tax regime as against the existing tax regime,” says Surabhi Marwah, Tax Partner, EY India.
The under income tax calculation tables clarify this in larger element:
Source: EY
