New Delhi, February 1, 2025 – In a significant move to provide tax relief to the middle class, Union Finance Minister Smt. Nirmala Sitharaman announced sweeping changes to the income tax structure while presenting the Union Budget 2025-26 in Parliament today.
Key Tax Reforms:
- No Income Tax for Annual Income up to ₹ 12 Lakh:
- Individuals earning up to ₹ 12 lakh annually will not be required to pay any income tax under the new regime.
- For salaried taxpayers, the exemption limit extends to ₹ 12.75 lakh due to a standard deduction of ₹ 75,000.
- Revised Tax Slabs:
The new tax regime features simplified slabs to benefit all taxpayers:- ₹ 0–4 lakh: Nil
- ₹ 4–8 lakh: 5%
- ₹ 8–12 lakh: 10%
- ₹ 12–16 lakh: 15%
- ₹ 16–20 lakh: 20%
- ₹ 20–24 lakh: 25%
- Above ₹ 24 lakh: 30%
- Boost to Household Consumption and Investment:
The Finance Minister emphasized that these reforms will leave more disposable income in the hands of the middle class, thus stimulating household consumption, savings, and investment.
Also read: Union Budget 2025-26: Major Tax Reliefs, Reforms in Agriculture, MSMEs, and Investments
- Simplification and Transparency:
- The new income-tax bill aims to simplify tax administration, promote tax certainty, and reduce litigation.
- The Finance Minister reiterated the government’s commitment to a ‘trust first, scrutinize later’ philosophy, fostering a responsive and taxpayer-friendly governance structure.
Government’s Vision for Viksit Bharat:
Highlighting taxation reforms as a cornerstone for realizing the vision of ‘Viksit Bharat,’ Smt. Sitharaman quoted Tamil poet Thiruvalluvar, “Just as living beings live expecting rains, citizens live expecting good governance.” The reforms are designed to ensure that governance remains responsive and attuned to the needs of the people.
Source:PIB
