| In the New Tax Regime, zero tax on income up to ₹12 lakhs, and if you're a salaried employee, you benefit even more with an uplift to ₹12.75 lakhs due to a standard deduction of ₹75,000. |
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The tax slabs have been restructured as follows: |
The government has announced changes in the tax structure for the financial year 2025-26 under the new tax regime, focusing primarily on benefiting the middle class. Here’s a detailed explanation based on the images provided:
1. Income Tax Exemption up to ₹12 Lakhs:
• Individuals with an income of up to ₹12 lakh are exempt from income tax under the new tax regime. For salaried taxpayers, this limit is extended to ₹12.75 lakh due to the ₹75,000 standard deduction.
2. New Tax Slabs:
For income beyond ₹12 lakh, the following tax slabs and rates apply:
Income Range Tax Rate
0 - 4 lakh rupees Nil
4 - 8 lakh rupees 5%
8 - 12 lakh rupees 10%
12 - 16 lakh rupees 15%
16 - 20 lakh rupees 20%
20 - 24 lakh rupees 25%
Above 24 lakh rupees 30%
3. Benefits and Rebate:
The government has structured tax benefits to ensure the middle class retains more of their earnings. For incomes up to ₹12 lakh, individuals benefit from a rebate system, reducing their tax liability. Incomes over ₹12 lakh are taxed as per the above slabs without rebates.
4. Tax Benefit Comparison (Present vs Proposed):
• Up to 8 lakhs: No tax after a total benefit of ₹30,000.
• 9 lakhs: No tax after a total benefit of ₹40,000.
• 10 lakhs: No tax after a total benefit of ₹50,000.
• 11 lakhs: No tax after a total benefit of ₹65,000.
• 12 lakhs: No tax after a total benefit of ₹80,000.
• 16 lakhs: Tax payable: ₹1,20,000 after a benefit of ₹50,000.
• 20 lakhs: Tax payable: ₹2,00,000 after a benefit of ₹90,000.
• 24 lakhs: Tax payable: ₹3,00,000 after a benefit of ₹1,10,000.
• 50 lakhs: Tax payable: ₹10,80,000 after a benefit of ₹1,10,000.
To summarize, salaried taxpayers with an income of up to ₹12.75 lakh are fully exempt from paying taxes due to the standard deduction and rebate benefits, while higher-income earners will be taxed progressively according to the new slabs outlined.
💰 Income up to Rs 12 Lakhs? Here’s how your #IncomeTax breaks down:
For the first ₹4 Lakhs: You pay ₹0.
For the next ₹4 Lakhs (₹4L to ₹8L): 5% tax = ₹20,000.
For the next ₹4 Lakhs (₹8L to ₹12L): 10% tax = ₹40,000.
💵Total Tax: ₹60,000
But wait, there’s a Standard Deduction of ₹75,000, which reduces the tax amount to ₹0.
Result: If your income is ₹12 Lakhs, after the standard deduction, you pay no tax
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