Budget 2025: Revised Income Tax Slabs Bring Big Relief for Taxpayers
Under the revamped income tax regime, individuals earning up to Rs. 12 lakhs annually will no longer be obligated to pay taxes.
By: Tupaki Desk | 1 Feb 2025 7:31 AM GMTFinance Minister Nirmala Sitharaman presented the Union Budget 2025 bringing major changes aimed at supporting the middle class, boosting infrastructure and improving various sectors of the economy. One of the biggest highlights was the revised income tax slabs offering significant relief to taxpayers.
Revised Income Tax Slabs
The government has introduced new tax slabs increasing the no-tax limit to ₹4 lakh and offering tax rebates up to ₹12 lakh. The updated tax rates are:
- Up to ₹4 lakh: No tax
- ₹4-8 lakh: 5%
- ₹8-12 lakh: 10%
- ₹12-16 lakh: 15%
- ₹16-20 lakh: 20%
- ₹20-25 lakh: 24%
- Above ₹25 lakh: 30%
This new structure provides direct benefits to middle-class families reducing their financial burden. A taxpayer earning ₹12 lakh annually will save ₹80,000 under the new system.
The Union Budget 2025 has also brought significant changes to taxation particularly in TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) regulations. The exemption limit for TDS on salary has been increased from ₹2.4 lakh to ₹6 lakh providing relief to many taxpayers. Additionally, the TDS and TCS exemption limits on financial dividends have been raised from ₹50,000 to ₹1 lakh. The LRS (Liberalized Remittance Scheme) TCS threshold has also been revised increasing from ₹7 lakh to ₹10 lakh. Furthermore, the government has proposed reducing the TCS on educational remittances up to ₹10 lakh making overseas education more affordable for students.