Income Tax Slabs Budget 2025: No Income Tax Till Rs 12 lakh, Check New Slabs

In a significant move aimed at providing relief to taxpayers, the Union Budget for the fiscal year 2025-26 has introduced a new income tax structure under the revised tax regime. According to the announcement made by Finance Minister Nirmala Sitharaman, there will be no income tax payable for individuals earning up to Rs 12 lakh under the new tax system.

Previously, the standard deduction was capped at Rs 75,000, but the revised tax slab brings significant changes, benefiting taxpayers across different income brackets.

Income Tax Slabs under the new tax regime in FY26

• 0 to Rs 4 Lakh: Nil (No tax)
• Rs 4 Lakh to 8 Lakh: 5%
• Rs 8 Lakh to 12 Lakh: 10%
• Rs 12 Lakh to 16 Lakh: 15%
• Rs 20-24 Lakh - 25%
• Above Rs 24 Lakh - 30%

A 4% cess will be applied to the total tax amount, with additional surcharges applicable for incomes exceeding Rs 50 lakh.

Please note that no announcement has been made on old tax regime yet.For taxpayers with an income up to ₹12 lakh (excluding special income like capital gains), the government is offering a tax rebate and a reduction in tax slabs. This means that, after applying the rebate and reduced rates, they won't need to pay any tax.

This new tax structure is designed to provide tax relief to the middle-class population, making it easier for individuals to save more of their earnings. The significant reduction in taxes for income levels below Rs 12 lakh is expected to have a positive impact on the disposable income of millions of taxpayers.

The government has made it clear that these tax changes are aimed at simplifying the tax process and providing more incentives for individuals to invest in the country's growth, benefiting both taxpayers and the overall economy.