In a significant move aimed at providing relief to the middle class, Finance Minister Nirmala Sitharaman on Saturday announced that individuals earning up to Rs 12 lakh annually will no longer have to pay any income tax under the newly rejigged tax regime.
In a significant move aimed at providing relief to the middle class, Finance Minister Nirmala Sitharaman on Saturday announced that individuals earning up to Rs 12 lakh annually will no longer have to pay any income tax under the newly rejigged tax regime. The new system, which was introduced as part of the Budget 2025, raises the exemption limit and modifies tax slabs to provide considerable tax relief.
For salaried employees, the tax-free limit is extended to Rs 12.75 lakh per annum after factoring in a standard deduction of Rs 75,000. The finance minister emphasized that the new structure would significantly lower tax burdens for the middle class, leaving them with more disposable income, which is expected to boost household consumption, savings, and investments.
"I am now happy to announce that there will be no income tax payable up to income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime," the finance minister said.
"The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment," Sitharaman said in her Budget speech.
For those earning above Rs 12 lakh annually, the revised tax structure includes:
- Nil tax on income up to Rs 4 lakh
- 5% tax for income between Rs 4 lakh and Rs 8 lakh
- 10% tax for income between Rs 8 lakh and Rs 12 lakh
- 15% tax for income between Rs 12 lakh and Rs 16 lakh
- 20% tax for income between Rs 16 lakh and Rs 20 lakh
- 25% tax for income between Rs 20 lakh and Rs 24 lakh
- 30% tax for income exceeding Rs 24 lakh annually
As a result of these changes, individuals in the new regime stand to benefit significantly. For instance, someone earning Rs 12 lakh will save around Rs 80,000 in taxes. A taxpayer with an income of Rs 18 lakh will benefit by approximately Rs 70,000, while those earning Rs 25 lakh can expect a tax reduction of about Rs 1.10 lakh.
Middle Class right now memes explode
As the announcement spread across social media, it didn’t take long for the internet to react—through memes. With the middle-class now exempt from paying taxes on earnings up to Rs 12 lakh, netizens took to platforms to share humourous reactions. Here's a look at some of the memes that went viral.