Govt Eases Middle-Class Burden: No Tax Up to ₹12 Lakh, But Crossing It Triggers Tax from ₹4 Lakh

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.