In a major relief for middle-class taxpayers, finance minister Nirmala Sitharaman announced that individuals earning up to ₹12 lakh per year will now pay zero income tax under the new tax regime. For salaried taxpayers, this limit will be ₹12.75 lakh, factoring in the ₹75,000 standard deduction.
“Our government has consistently reduced the tax burden on the middle class, recognising their immense contribution to nation-building,” Sitharaman stated. “From raising the nil tax slab to ₹2.5 lakh in 2014, ₹5 lakh in 2019, and ₹7 lakh in 2023, we have now taken a significant step forward by ensuring no income tax is payable up to ₹12 lakh.”
Under the revised tax regime, individuals earning up to ₹12 lakh annually will not be required to pay any income tax.
For those earning above ₹12 lakh, the government has also revamped tax slabs to provide broader benefits:
- ₹0 - ₹4 lakh: Nil
- ₹4 - ₹8 lakh: 5%
- ₹8 - ₹12 lakh: 10%
- ₹12 - ₹16 lakh: 15%
- ₹16 - ₹20 lakh: 20%
- ₹20 - ₹24 lakh: 25%
- Above ₹24 lakh: 30%
Additionally, a rebate has been introduced for incomes up to ₹12 lakh, ensuring no tax liability beyond the relief from slab rate changes. For instance, a taxpayer earning ₹12 lakh under the new regime will save ₹80,000, effectively eliminating their tax liability under existing rates.
The revised tax structure aims to boost household consumption, savings, and investments, further strengthening the middle class and the broader economy.
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