Union Finance Minister Nirmala Sitharaman gave big relief for the salaried individuals on Saturday, February 1. She has announced that no income tax up to an income of Rs 12 lakhs. "The middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens. I am now happy to announce that there will be no income tax up to an income of Rs 12 lakhs," said FM.
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During the announcement, which was accompanied by loud cheers and long desk thumping by NDA MPs, including Prime Minister Narendra Modi, she also announced revisions to the tax slabs.
Providing significant relief to taxpayers, Sitharaman stated that the new income tax regime will be simpler, with a special focus on benefiting the middle class and salaried section. She announced that income tax slabs and rates are being revised across the board, ensuring a more progressive taxation system.
"The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment," Sitharaman said in her Budget speech. Individuals earning up to Rs 25 lakh will receive a tax benefit of up to Rs 1.1 lakhs, further easing the financial burden on the middle-income group.
Income Tax Slabs Under New Tax Regime 2024-25
As per the rejig, for people earning more than Rs 12 lakh per annum, there will be nil tax for income up to Rs 4 lakh, 5% for income between Rs 4 and 8 lakh, 10% for Rs 8-12 lakh, 15% for Rs 12-16 lakh. A 20% income tax will be levied on income between Rs 16 and 20 lakh, 25% on Rs 20-24 lakh and 30% above Rs 24 lakh per annum.
In the new regime, a taxpayer with an income of Rs 12 lakh will receive Rs 80,000 in tax benefits. A person with an income of Rs 18 lakh will receive Rs 70,000 in tax benefits. A person with an income of Rs 25 lakh will receive Rs 1.10 lakh in tax benefits.
Taxpayers without business income can opt between the new and old tax regimes every financial year. A 4% cess will be applied to the total tax amount, with additional surcharges applicable for incomes exceeding Rs 50 lakh.