New Income Tax slab
No Income Tax Up to ₹12 Lakh
There will be no tax up to 12 lakhs. Finance Minister Smt. Nirmala Sitharaman has given a big gift to the taxpayers. In the budget speech on Saturday, she has announced important changes in the income tax system. Under the new tax rules, individuals earning up to 12 lakh rupees are not required to pay any tax under the new tax system and if the limit of additional standard deduction of 75000 thousand is added for salaried individuals, then this limit becomes 12.75 lakh rupees. Earlier the tax-free limit was 7 lakhs, which has been increased to 12 lakhs in this budget.
New Tax Reform: A Relief for Taxpayers and the Middle Class
This is the good news for the taxpayers and middle-class people of the country. The purpose of this change is to reduce the financial burden on them and encourage buying, saving and investing. Although the old tax system has just been changed, the taxpayers still have the option to choose one of the two tax systems. However, the finance minister has said that the government will introduce a New Income Tax Bill next week new Income Tax Bill will be introduced in the Parliament within a week, the government will introduce a New Income Tax Bill next week
Tax Exemption and New Slab Structure
The government is praising itself for the decision of not collecting any tax from people having annual income up to Rs 12 lakh. But you need to understand one important thing, if a person’s income is even 1 rupee more than Rs 12 lakh, then he will have to pay tax according to the new tax slab. Smt Nirmala Siharaman said “I propose to revise tax rate structures as follows: 0 to ₹4 Lakhs – nil, ₹4 Lakhs to ₹8 Lakhs – 5%, ₹8 Lakhs to ₹12 Lakhs – 10%, ₹12 Lakhs to ₹16 Lakhs – 15%, ₹16 Lakhs to ₹20 Lakhs – 20%, ₹20 Lakhs to ₹24 Lakhs – 25% and above ₹24 Lakhs – 30%. To taxpayers up to ₹12 Lakhs of normal income other than special rate income such as capital gains, a 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,”
New Income Tax Slabs (FY 2025-26)
| Income Tax Slabs | Tax Rate |
| Upto Rs. 4,00,000 | NIL |
| Rs. 4,00,001 – Rs. 8,00,000 | 5% |
| Rs. 8,00,001 – Rs. 12,00,000 | 10% |
| Rs. 12,00,001 – Rs. 16,00,000 | 15% |
| Rs. 16,00,001 – Rs. 20,00,000 | 20% |
| Rs. 20,00,001 – Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
Below is a detailed comparison of benefit from the current and proposed tax regimes:
| Income | Tax on Slabs and Rates | Benefit of | Rebate Benefit | Total Benefit | Tax after rebate and Benefit | |
| Present | Proposed | Rate/Slab | Full upto Rs.12 Lakh | |||
| 8 Lakh | 30,000 | 20,000 | 10,000 | 20,000 | 30,000 | 0 |
| 9 Lakh | 40,000 | 30,000 | 10,000 | 30,000 | 40,000 | 0 |
| 10 Lakh | 50,000 | 40,000 | 10,000 | 40,000 | 50,000 | 0 |
| 11 Lakh | 65,000 | 50,000 | 15,000 | 50,000 | 65,000 | 0 |
| 12 Lakh | 80,000 | 60,000 | 20,000 | 60,000 | 80,000 | 0 |
| 16 Lakh | 1,70,000 | 1,20,000 | 50,000 | 0 | 50,000 | 1,20,000 |
| 20 Lakh | 2,90,000 | 2,00,000 | 90,000 | 0 | 90,000 | 2,00,000 |
| 24 Lakh | 4,10,000, | 3,00,000 | 1,10,000 | 0 | 1,10,000 | 3,00,000 |
| 50 Lakh | 11,90,000 | 10,80,000 | 1,10,000 | 0 | 1,10,000 | 10,80,000 |
Impact of the New Tax Structure
The new tax structure will leave more money in the hands of middle-class families. By reducing the burden of taxes, the government hopes that it will encourage more domestic spending, savings, and investment, which can help the economy grow. However, this will have an impact on government revenue. This move will benefit taxpayers but the government will have to lose a large part of tax revenue. The finance minister has said in the budget speech that due to these changes; the government will lose about 1 lakh crore in direct tax. Consequently, government spending on infrastructure and other development projects may be affected until alternative sources of revenue are identified.
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