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Published 12:28 IST, February 1st 2025

Zero Tax for Income Up To Rs 12 Lakh Under New Tax Regime, Check Changes in Tax Slabs and Rate Change

In a huge announcement, FM Nirmala Sitharaman has announced zero income tax under the new tax regime; check tax slabs and rate change...

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Budget 2025: Check Changes in Tax Slabs and Rate Change
Budget 2025: Check Changes in Tax Slabs and Rate Change | Image: Republic

New Delhi: Finance Minister Nirmala Sitharaman has presented her eighth consecutive Budget in the Parliament today and one of the biggest highlights of the Union Budget 2025 is the income tax exemption. In a big relief to the tax payers, Nirmala Sitharaman has announced zero income tax under the new tax regime. 

FM Nirmala Sitharaman's Big Announcement, Zero Income Tax Under New Tax Regime

In a major announcement, Finance Minister Nirmala Sitharaman has announced zero income tax for income up to Rs 12 lakh under the new tax regime. Take a look at the complete list of changes in tax slabs and rate change.

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.

Union Budget 2025: List of Changes in Tax Slabs and Rate Change

Following are the revised slabs and rates under new tax regime announced in the FY26 Budget: 

Income up to Rs 4 lakh (per annum) ----- Nil 

Between Rs 4 and 8 lakh ---------------- 5 per cent (tax) 

Between Rs 8 and 12 lakh --------------- 10 per cent 

Between Rs 12 and 16 lakh -------------- 15 per cent 

Between Rs16 and 20 lakh --------------- 20 per cent 

Between Rs 20 and 24 lakh -------------- 25 per cent 

Above Rs 24 lakh ------------------------- 30 per cent 

Nil tax slab will apply for annual income up to Rs 12 lakh (Rs 12.75 lakh for salaried tax payers with standard deduction of Rs 75,000) under new tax regime. 

(Inputs from PTI)

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Updated 12:55 IST, February 1st 2025