Date: February 01, 2025
Budget 2025: No Income Tax for Earnings Below 12 Lakh
Budget 2025: No Income Tax for Earnings Below ₹12 Lakh – Major Relief for Middle Class
The highly anticipated Budget 2025 was unveiled today in Parliament, with Finance Minister Nirmala Sitharaman announcing a major income tax reform that is set to benefit millions of taxpayers. Amid widespread speculation, the finance minister confirmed that individuals earning up to ₹12 lakh annually will now be exempt from income tax, bringing significant relief to the middle-class population.
Tax Exemption for Income Up to ₹12 Lakh
Addressing the nation, Nirmala Sitharaman stated:
“To taxpayers with an income up to ₹12 lakh, a tax rebate is being provided in addition to the benefit due to slab rate reduction, ensuring no tax liability for them.”
This announcement marks a significant shift in India’s taxation policy, easing financial pressure on middle-class families, who form a substantial portion of the country’s economic framework.
New Income Tax Slabs for Budget 2025
The revised tax slabs under the new regime are as follows:
- ₹0 – ₹4 Lakh: 0% (No Tax)
- ₹4 Lakh – ₹8 Lakh: 5%
- ₹8 Lakh – ₹12 Lakh: 10% (Eligible for rebate, making it 0%)
- ₹12 Lakh – ₹16 Lakh: 15%
- ₹16 Lakh – ₹20 Lakh: 20%
- ₹20 Lakh – ₹24 Lakh: 25%
- ₹24 Lakh+: 30%
How the Tax Rebate Works
While the tax rate for ₹8 lakh – ₹12 lakh is marked at 10%, taxpayers in this income bracket can avail a full rebate, ensuring zero tax liability. This move expected to enhance savings and provide financial stability to millions of salaried professionals and small business owners.
Public Reactions and Economic Impact
The announcement has received an overwhelmingly positive response on social media, with many praising the government for addressing middle-class concerns. Experts believe this reform will:
- Increase disposable income for consumers.
- Boost economic growth through higher spending power.
- Encourage better compliance and simplified tax filing.
With Budget 2025 introducing these tax reforms, financial experts suggest that this move could also stimulate investments and further drive economic expansion.
Stay tuned for more budget updates and tax-saving tips!