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Updated 13:31 IST, February 1st 2025

No Income Tax For Upto Rs 12 Lakh Per Annum In New Tax Regime

Union Finance Minister Nirmala Sitharaman announces the biggest income tax relief for the common man in Union Budget 2025.

Reported by: Digital Desk
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Govt announces biggest tax relief for common man in Union Budget 2025 | Image: Republic Media Network

Zero Income Tax For Upto Rs 12 LPA: In one of the biggest tax relief ever in the history, Union Finance Minister Nirmala Sitharaman in the Modi Govt 3.0 on Saturday announced a major relief for the common man as it exempted income tax on personal income for upto Rs 12 lakhs per annum in the new tax regime.

Making the popular announcement, Finance Minister Nirmala Sitharaman said, “I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs.”

"No Income Tax payable up to an income of Rs 12 Lakh. Slabs and rates being changed across the board to benefit all tax-payers," Nirmala Sitharaman said.

Full rebate upto Rs 12 LPA | Income Tax benefits maths explained 

Salary |  0-4 LPA

  • Tax Slab | NIL
  • Rebate | NA

Salary | 4-8 LPA

  • Tax slab | 5%
  • Rebate | 100%

After 100% rebate, the net income tax payable is Rs 0.

Salary | 8-12 LPA

  • Tax slab | 10%
  • Rebate | 100%

After 100% rebate, once again the net income tax payable will be Rs 0.

Continuing with the big relief, Sitharaman said, “...I propose to revise tax rate structures as follows: 0 to Rs 4 Lakhs - nil, Rs 4 Lakhs to Rs 8 Lakhs - 5%, Rs 8 Lakhs to Rs 12 Lakhs - 10%, Rs  12 Lakhs to Rs 16 Lakhs - 15%, Rs 16 Lakhs to Rs 20 Lakhs - 20%, Rs 20 Lakhs to Rs 24 Lakhs - 25% and above Rs 24 Lakhs - 30%. To taxpayers up to Rs 12 Lakhs 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 middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs," Sitharaman said in another statement.

Making more announcements on other aspects of income, Sitharaman said, “I propose to rationalise TDS by reducing the number of rates and thresholds above which TDS is deducted.”

"Further, threshold amounts for tax deduction will be increased for better clarity and uniformity. The limit for TDS on interest for senior citizens is being doubled for the present Rs 50,000 to Rs 1 Lakh. Similarly, the annual limit of Rs 2.40 Lakh for TDS on rent is being increased to Rs 6 Lakh. The threshold to collect TCS on remittances under RBI 's liberalised remittance scheme is proposed to be increased from Rs 7 Lakh to Rs Rs 10 Lakhs. I also propose to remove remittances for education purposes where such remittances is out of loan taken from a specified financial institution," the Finance Minister said.

Finance Minister Sitharaman in another big announcement informed that the government will introduce a new income tax bill next week, details of which are awaited.

Published 12:16 IST, February 1st 2025