The new budget declares income up to ₹12 lakh tax-free and retains the ₹75,000 standard deduction, resulting in no tax on salaries up to ₹12.75 lakh annually.
In this budget, the government has made income up to ₹12 lakh tax-free under the new tax regime. There is also a standard deduction of ₹75,000 for the salaried class.
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Tax levied
This means that no tax will be levied on the annual salary of salaried employees up to ₹12.75 lakh.
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Salaries of crores of employees are about to increase
This system has come into effect from the new financial year i.e. 1st April 2025. In such a situation, the salaries of crores of employees are going to increase without any evaluation.
Until now, a person with a salary of 1 lakh rupees had to pay 71,500 rupees in tax
Under the previous new tax regime, individuals earning ₹1 lakh monthly (₹12 lakh annually) paid ₹71,500 in income tax until March 2025, equivalent to ₹5,958 monthly.
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How much benefit will people with a salary of 1 lakh rupees get now?
From April 1, 2025, income up to ₹12.75 lakh is tax-free under the new tax regime. Individuals earning ₹1 lakh monthly will see a ₹5,958 increase in their take-home pay.
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Earlier, under the new tax regime, income up to 7 lakh rupees was tax-free
Previously, only income up to ₹7 lakh was tax-free under the new regime. The 2025 budget increased this limit by ₹5 lakh to ₹12 lakh, directly benefiting the middle class.
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Why is the new tax regime beneficial?
From April 1, 2025, the new tax regime is the default. You'll receive its benefits automatically. Taxpayers can still opt for the old regime if desired.
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Who is the old tax regime still beneficial for?
The old tax regime benefits those receiving HRA, paying home loans, or investing in mutual funds, LIC, medical insurance, or government schemes.
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1 crore taxpayers will directly benefit
According to Finance Minister Nirmala Sitharaman, 1 crore taxpayers will directly benefit from the new tax slab changes and will no longer have to pay taxes.
