New income tax slabs: Finance Minister Nirmala Sitharaman has announced new income tax slabs for salaried individuals in her Union Budget 2025 speech. Under the new tax regime, now there will be no tax on income up to ₹ 12 lakh. Let’s find out when these new slabs will be implemented and what changes have been made.
What did Finance Minister Nirmala Sitharaman say?
In the Budget speech, the Finance Minister declared that under the new tax regime, those whose annual income is up to ₹ 12 lakh will no longer have to pay any income tax. If you are a salaried employee and take a basic deduction of ₹ 75,000, then this limit increases to ₹ 12.75 lakh.
The government says that the middle-class will get great benefits from these new slabs. This will keep more money in their hands, which will boost consumption, savings, and investment.
What changes have been made in the Income Tax Slabs in Budget 2025?
Nirmala Sitharaman announced these new tax slabs in her 8th consecutive Union Budget:
₹0 – ₹4 lakh: Nil (no tax)
₹4 – ₹8 lakh: 5% tax
₹8 – ₹12 lakh: 10% tax
₹12 – ₹16 lakh: 15% tax
₹16 – ₹20 lakh: 20% tax
₹20 – ₹24 lakh: 25% tax
₹24 lakh or more: 30% tax
Nirmala Sitharaman announced these new tax slabs in her 8th consecutive Union Budget:
₹0 – ₹4 lakh: Nil (no tax)
₹4 – ₹8 lakh: 5% tax
₹8 – ₹12 lakh: 10% tax
₹12 – ₹16 lakh: 15% tax
₹16 – ₹20 lakh: 20% tax
₹20 – ₹24 lakh: 25% tax
₹24 lakh or more: 30% tax
How will the new Income Tax slabs work?
Those whose annual income is up to ₹12 lakh, will no longer have to pay any income tax.
If your income is more than ₹12 lakh, then you will have to pay slab-wise tax:
No tax on income up to ₹4 lakh.
5% tax on income between ₹4-8 lakh.
10% tax on ₹8-12 lakh.
15% tax on ₹12-16 lakh.
20% tax on ₹16-20 lakh.
25% tax on ₹20-24 lakh.
And 30% tax on income above ₹24 lakh.
When will the new Income Tax slabs be implemented?
These new income tax slabs will be applicable from Financial Year 2025-26. If seen in terms of Assessment Year (AY), it will be applicable for AY 2026-27.
Conclusion: The new tax reforms of Budget 2025 will greatly benefit the salaried class, especially the middle-class. You can also update your tax planning according to these new slabs!
