Finance Minister Nirmala Sitharaman provided a major relief to the middle class while presenting the budget on Friday. She announced that people with an annual income of up to Rupees 12 lakh will no longer have to pay any tax. Earlier, those with an annual income of Rupees 12 lakh had to pay Rupees 71,500 in tax. Let’s take a look at how much tax will need to be paid based on different income levels after the new tax slab and the benefits it brings.
If your annual income is up to Rupees 12 lakh, you will not have to pay any tax. If your income is Rupees 13 lakh, earlier you had to pay a tax of Rupees 88,400, but after the change in the slab, now you will have to pay only Rupees 66,300. This means you will save about Rupees 22,100 in taxes.
Who Will Benefit from the New Tax Slab?
- Those earning Rupees 15 lakh annually: Earlier, they had to pay a tax of Rupees 1.30 lakh, but after the new slab, they will only pay Rupees 97,500. This means they will save Rupees 32,500 in taxes.
- Those earning Rupees 17 lakh annually: They had to pay a tax of Rupees 1,84,600, but now, with the new slab, they will pay only Rupees 1,30,000, saving Rupees 54,600.
Income Tax Comparison: Old vs New Slabs
| Income | Old Tax | New Tax | Benefit/Loss |
|---|---|---|---|
| Rupees 12 lakh | Rupees 71,500 | Rupees 0 | Rupees 71,500 |
| Rupees 13 lakh | Rupees 88,400 | Rupees 66,300 | Rupees 22,100 |
| Rupees 15 lakh | Rupees 1,30,000 | Rupees 97,500 | Rupees 32,500 |
| Rupees 17 lakh | Rupees 1,84,600 | Rupees 1,30,000 | Rupees 54,600 |
| Rupees 22 lakh | Rupees 3,40,600 | Rupees 2,40,500 | Rupees 1,00,100 |
| Rupees 25 lakh | Rupees 4,34,200 | Rupees 3,19,800 | Rupees 1,14,400 |
Revised Tax Slabs: Know Your Tax Benefits & Liabilities!”
The new income tax regime brings significant relief, ensuring zero tax on income up to ₹12 lakh and enhanced rebates for salaried individuals. With the revised slabs, taxpayers can now enjoy lower tax rates and higher… pic.twitter.com/IPddzuQvMf
— 5paisa (@5paisa) February 1, 2025
Summary of Benefits
- Rupees 22 lakh income: You will save Rupees 1,00,100 in tax (new slab tax: Rupees 2,40,500).
- Rupees 25 lakh income: You will save Rupees 1,14,400 in tax (new slab tax: Rupees 3,19,800).
Upcoming Income Tax Bill
The Finance Minister announced that the government will introduce a new Income Tax Bill next week. This will simplify the tax system and make it more transparent. Additionally, the budget also mentioned an increase in the Foreign Direct Investment (FDI) limit for the insurance sector. The tax deduction limit for interest income for senior citizens will also be doubled to Rupees 1 lakh.
This new tax reform will provide great relief to many taxpayers, especially the middle class.
