New Delhi: 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.Finance Minister also announced rationalisation of TDS (Tax Deduction at Source) regime to ease compliance burden. Presenting the Budget for 2025-26, she said tax proposals are guided by income tax reforms for middle class, TDS rationalisation, and easing compliance burden.The government will also be introducing a new Income Tax (I-T) bill in Parliament next week.Reforms are not destinations but means to achieve good governance for the people and economy, the finance minister said and added that the new I-T bill will be half of the current volume, clear and direct in wording.Meanwhile, the government will increase the limit of TCS on remittances under RBI's liberalised remittance scheme from Rs 7 lakh to Rs 10 lakh.Also, Sitharaman said that 35 additional goods for EV battery, 28 additional goods for mobile phone battery production will be included in the list of exempted capital goods. Finance Minister also said the Union Budget 2025-26 will initiate reforms in six areas of taxation, urban development, mining, financial sector, power and regulatory framework. Presenting her eighth consecutive budget, she said the government's development track record of the past 10 years and structural reforms have drawn global attention.A Viksit Bharat will have zero poverty, quality education, high-quality, affordable and comprehensive healthcare, she said and added that the budget's focus is to take everyone together on inclusive growth path.
New Delhi: 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.Finance Minister also announced rationalisation of TDS (Tax Deduction at Source) regime to ease compliance burden. Presenting the Budget for 2025-26, she said tax proposals are guided by income tax reforms for middle class, TDS rationalisation, and easing compliance burden.The government will also be introducing a new Income Tax (I-T) bill in Parliament next week.Reforms are not destinations but means to achieve good governance for the people and economy, the finance minister said and added that the new I-T bill will be half of the current volume, clear and direct in wording.Meanwhile, the government will increase the limit of TCS on remittances under RBI's liberalised remittance scheme from Rs 7 lakh to Rs 10 lakh.Also, Sitharaman said that 35 additional goods for EV battery, 28 additional goods for mobile phone battery production will be included in the list of exempted capital goods. Finance Minister also said the Union Budget 2025-26 will initiate reforms in six areas of taxation, urban development, mining, financial sector, power and regulatory framework. Presenting her eighth consecutive budget, she said the government's development track record of the past 10 years and structural reforms have drawn global attention.A Viksit Bharat will have zero poverty, quality education, high-quality, affordable and comprehensive healthcare, she said and added that the budget's focus is to take everyone together on inclusive growth path.