Union Budget 2025: Major Tax Relief for Salaried Individuals – New Slabs & Savings Explained
In a significant move benefiting the middle class, Finance Minister Nirmala Sitharaman has raised the income tax exemption limit for salaried taxpayers to ₹12.75 lakh, accompanied by a standard deduction of ₹75,000. This update under the Union Budget 2025 aims to ease financial pressure on salaried professionals and encourage savings.
Revised Tax Slabs – What’s New?
Effective from April 1, 2025, under the new financial year (FY 2025-26), the tax structure has been reshaped, offering substantial relief. Here’s how:
No tax on annual income up to ₹4 lakh
Tax savings:
- ₹80,000 for those earning ₹12 lakh
- ₹70,000 for those earning ₹18 lakh
- ₹1,10,000 for those earning ₹25 lakh
New Tax Slabs:
- ₹4 lakh – ₹8 lakh → 5%
- ₹8 lakh – ₹12 lakh → 10%
- ₹12 lakh – ₹16 lakh → 15%
- ₹16 lakh – ₹20 lakh → 20%
- ₹20 lakh – ₹24 lakh → 25%
- Above ₹24 lakh → 30%
Enhanced Tax Rebate – Zero Tax on Income Up to ₹12 Lakh!
Another major highlight is the increased rebate under Section 87A, ensuring that individuals with a net taxable income of up to ₹12 lakh will pay zero tax. However, if your income exceeds ₹12 lakh, the applicable slab rates will determine your final tax liability.
Important Note: Income from capital gains will not qualify for this rebate and will be taxed under separate rules.
This budgetary shift marks a major relief for salaried professionals, reducing tax burdens while promoting disposable income growth. Stay informed, plan your finances wisely, and make the most of these changes!
