sb.scorecardresearch

Updated 15:02 IST, February 1st 2025

How Much Sitharaman Saved You in Taxes? Understanding The Maths

Let's take a look at how one will be able to save money after changes in the income tax as announced by Finance Minister Nirmala Sitharaman.

Reported by: Digital Desk
Follow: Google News Icon
  • share
Budget 2025, income tax 2025
How much Finance Minister Nirmala Sitharaman has saved you in income tax | Image: Republic Media Network

New Delhi: In a big relief for the middle class, the Modi government on Saturday announced that there will be no tax on income upto Rs 12 Lakh Per Annum under the new tax regime, as Finance Minister Nirmala Sitharaman presented the Union Budget 2025. 

Though there will be tax slabs with different rates depending upon a person's income, but after availing the tax benefit and exemption based on their income slabs, the net tax that will be payable by the people upto Rs 12 lakhs per annum will be zero, in the new tax regime.

Overall, this limit will be Rs 12.75 lakh rupees for salaried tax payers counting Rs 75,000 of standard deduction as per the 8-12 LPA tax slab.

Sitharaman stated that the new income tax regime will be simpler, with a special focus on benefiting the middle class. For example, the income tax rate in the new regime on 8-12 LPA is 10 per cent. But according to today's announcement by Sitharaman, the government will provide full rebate bringing the net tax payable to Rs 0. Below is the rate-slab-wise breakdown of income tax that citizens will have to pay.     

How net income tax upto Rs 12 LPA will be Rs 0? 

The exemption can be earned only if a tax payer takes relief under various sections of the income tax act like Rs 1.5 lakh exemption under section 80CCC, exemption of Rs 1.5 lakh for paying interest on home loans.

Sitharaman said, “To tax payers up to Rs 12 lakh of normal income (other than special rate income such as capital gains) tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them.”

The announcement from the Finance Minister of this big relief to the middle class was met by loud thumping of the desks by the treasury benches led by PM Narendra Modi .

Net income tax payable upto Rs 12 LPA

Tax payable on income of from Rs 13 LPA and above including tax benefit

SALARY                 

TAX EARLIER

TAX NOW

YOUR SAVING

13 LPA

1,00,000

75,000

25,000

14 LPA

1,20,000

90,000

30,000

15 LPA

1,40,000

1,05,000

35,000

16 LPA

1,70,1,000

1,20,000

50,000

17 LPA

2,00,000

1,40,000

60,000

18 LPA

2,30,000

1,60,000

70,000

19 LPA

2,60,000

1,80,000

80,000

21 LPA

3,20,000

2,25,000

95,000

22 LPA

3,50,000

2,50,000

1,00,000

23 LPA

3,80,000

2,75,000

1,05,000

24 LPA

4,10,000

3,00,000

1,10,000

25 LPA

4,40,000

3,30,000

1,10,000

26 LPA

4,70,000

3,60,000

1,10,000

27 LPA

5,00,000

3,90,000

1,10,000

28 LPA

5,30,000

4,20,000

1,10,000

29 LPA

5,60,000

4,50,000

1,10,000

30 LPA

5,90,000

4,80,000

1,10,000

40 LPA

8,901,000

7,80,000

1,10,000

50 LPA

11,90,000

10,80,000

1,10,000

Sitharaman announces income tax slabs, rates change? 

The finance minister announced change in income tax slabs and rates across the board, ensuring a more progressive taxation system.

Sitharaman said, “Slabs and rates are being changed across the board to benefit all tax-payers. 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.”

Under the new tax slabs income of up to Rs 4 lakh will have to pay Nil tax hiked from Rs 3 lakh. 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 1,10,000 under the new tax slabs.

"The total tax benefit of slab rate changes and rebate at different income levels can be illustrated with a few examples, a taxpayer in the new regime with an income of 12 lakh rupees will get a benefit of 80,000 rupees in tax, which is 100% of tax payable as per the existing rates.

A person having income of Rs 18 lakh rupees will get a benefit of 70,000 rupees in tax, that is 30% of tax payable as per existing base.

"A person with an income of 25 lakh gets a benefit of one lakh 10,000 rupees, that is 25% office tax payable as per existing rates," the Finance Minister said.

As a result of these proposals, revenue of about Rs 1 lakh crore in direct taxes and Rs 2,600 crore in indirect taxes will be forgone.

With inputs from ANI

Published 14:45 IST, February 1st 2025