Parul
In a big boost to the Indian middle class, Finance Minister Nirmala Sitharaman announced that there will be no income tax payable for incomes up to Rs 12 lakh, and Rs 12.75 lakh for salaried taxpayers (including standard deduction).
In the new tax regime, the revised tax rate structure is Rs 0-4 lakh (zero tax), Rs 4-8 lakh (5 per cent), Rs 8-12 lakh (10 per cent), Rs 12-16 lakh (15 per cent), Rs 16-20 lakh (20 per cent), Rs 20-24 lakh (25 per cent), and above Rs 24 lakh (30 per cent).
“The new tax structure would substantially reduce tax for the middle class,” announced FM Sitharaman.
Commenting on the announcement, Shruti Swaroop, Founder, Embrace Consulting said, “The 2025 Budget of India will be a watershed in financial empowerment, announcing no income tax up to Rs. 12 lakh, giving overwhelming relief to millennials and reducing financial stress for millions. This progressive shift in tax slabs is a long-overdue alleviation that will enrich and relieve taxpayers from all walks of life across the country,”
Swati Bhargava, Co-founder of CashKaro and EarnKaro also said that this announcement delivers a major relief to the middle class with the unprecedented increase in the income tax exemption limit to ₹12 lakh—the biggest announcement of the year. “This revision, along with the updated tax slabs, will allow individuals to retain more of their earnings, enhance savings, and drive higher investments,” she said.
Presenting the Union Budget 2025-26, FM Sitharaman said that the tax deduction at source (TDS) rates will be rationalised and the limit for tax deduction for senior citizens will be doubled to Rs 1 lakh.
FM Sitharaman also proposed to extend the time limit to file the updated return from two years to four years.
The threshold to collect TDS on remittances under the Liberalised Remittance Scheme (LRS) would be increased to Rs 10 lakh from Rs 7 lakh and an annual limit of Rs 2.4 lakh for TDS on rent has been raised to Rs 6 lakh.
Delay for payment of TCS up to the due date would be decriminalised, according to the Finance Minister, adding that TCS on remittances, if a loan was taken for education, has been waived.
The Union Budget also proposes to exempt withdrawals from National Savings Scheme (NSS) accounts on or after August 2024 from tax.
The Budget Session of Parliament, which commenced on Friday, will be conducted in two phases – the first started on January 31 and will conclude on February 13, while the second phase will begin on March 10 and end on April 4.
