Income of up to ₹ 12.75 lakh will not be charged ₹ 1 even tax! Learn how much tax will be saved on income of 15, 20, 25 lakhs

In Budget 2025, Finance Minister Nirmala Sitharaman has given great relief to middle class and employed people. Now no income tax will have to be paid on income up to Rs 12.75 lakh under New Tax Regime. Earlier, this income had to pay tax of up to Rs 80,000, but after the announcement of new tax slab and full rebate, it has now been completely forgiven. Apart from this, those with income ranging from 15 lakh to 25 lakh rupees will also get the benefit of heavy tax savings. Come, know how much you will benefit according to your income.

How did you get this benefit?

The government has given 100% tax rebate on income up to Rs 12 lakh.

Standard deduction is Rs 75,000, due to which the income of up to Rs 12.75 lakh has become free. Earlier, where Rs 80,000 had to be paid on income of Rs 12 lakh, now it will not have to pay a tax of Rs 1. Know how much tax can be saved on different income:

1) Income of Rs 12 lakh:

Earlier, you had to pay a tax of Rs 80,000 on this income. but now:

New Tax: Rs 60,000
Tax slab advantage: Rs 20,000
Rebet Benefit: Rs 60,000
Total Savings: Rs 80,000
Tax after rebate: 0 rupees

What does this mean?

Your entire income has become tax free. Earlier, where he had to pay 80,000 rupees, now nothing will have to be given.

2) Income of Rs 16 lakh:

Earlier, you had to pay a tax of Rs 1,70,000 on this income. but now:

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New Tax: Rs 1,20,000
Tax slab advantage: Rs 50,000
Rebet Benefit: 0 rupees
Total Savings: Rs 50,000
Tax after rebate: Rs 1,20,000

What does it mean?

You will have a direct savings of Rs 50,000 every year. Now you have to pay less tax than before.

3) Income of Rs 20 lakh:

Earlier you had to pay tax of Rs 2,90,000. but now:

New Tax: Rs 2,00,000
Tax slab advantage: Rs 90,000
Total Savings: Rs 90,000
Tax after rebate: Rs 2,00,000

What does it mean?

You will have an annual savings of Rs 90,000 on this income.

4) Income of Rs 24 lakh:

Earlier you had to pay tax of Rs 4,10,000. but now:

New Tax: Rs 3,00,000
Tax slab advantage: Rs 1,10,000
Rebet Benefit: 0 rupees
Total Savings: Rs 1,10,000
Tax after rebate: Rs 3,00,000

What does it mean?

If your income is Rs 24 lakh, then you will get a direct tax savings of Rs 1,10,000 every year.

What do experts say?

Anirudh Naha, Cio of PGIM India Alternatives, said, “Due to new income tax slab and rebets, the income of up to Rs 12 lakh has now become tax free, earlier the income up to Rs 7 lakh was tax free. This is a major relief for middle class and lower middle class, as this will increase their savings and increase the ability to spend. The government has increased the capital experience (capital expenditure) to Rs 11.20 lakh crore, which will strengthen the investment bicycle in the country. Overall, the government has focused on promoting both investment and consumption in this budget. ”

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Auto research analyst of Asit Sea Mehta Investment Intermediates Limited, Mrinamayi Joglekar, said that changes in New Tax Regime would increase middle class’s ability to spend, which was very important for the consumption sector. Now there will be no tax on annual income up to Rs 12 lakh (which was earlier 7 lakh rupees), and this is a big relief for the middle class. Apart from this, the maximum tax rate of 30% will now be applicable to income of more than Rs 24 lakh (earlier this limit was Rs 15 lakh).

He further said, this step will benefit the FMCG and Auto sector, which is currently affected by the lethargy in urban demand. FMCG companies will benefit from government schemes to improve food processing and agricultural productivity domestically, which is likely to increase demand in both rural and urban markets. At the same time, the domestic ecosystem of EV battery manufacturing for the auto sector and the cut in custom duty on essential minerals will improve the supply chain and increase profits in a long time. Overall, tax exemption and supply chain improvement will accelerate both consumption and investment, which will give new speeds to these areas.

Budget 2025-26: Big relief for middle class

While presenting the budget, Finance Minister Nirmala Sitharaman said that the government has always expressed confidence in the hard work and role of the middle class. Taking forward this trust, the budget 2025-26 has proposed a change in tax rates under the new tax system. The new system will not have to pay any tax on annual income of up to Rs 12 lakh, provided it does not include capital benefits like specific income. That is, whose monthly income is up to Rs 1 lakh, they will be completely tax free.

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For salaried taxpayers, this limit will be increased to Rs 12.75 lakh due to standard deduction of Rs 75,000. Its direct advantage will be that the middle class will get a chance to save more and they will be able to spend it in spending or investment. Due to this proposal, the government will lose direct tax revenue of Rs 1 lakh crore. But it aims to give relief to the middle class and promote consumption and investment in the country.

He further said, under the leadership of Prime Minister Narendra Modi, the government has taken several steps, understanding the needs of the people. These include improving individual income tax, making TDS/TCS easy, reducing compliance burden, and encouragement to increase investment and employment. Sitharaman said that these reforms will not only increase the savings of the middle class, but will also create new investment and employment opportunities in the country.

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