No income tax till Rs.12 lakh announces Finance Minister

During the Union Budget 2025, Finance Minister Nirmala Sitharaman announced sweeping changes to the personal income tax structure during the Union Budget presentation. The most striking reform—no income tax on earnings up to Rs.12 lakh—is expected to benefit millions of taxpayers across the country.

Unveiling the new tax regime, Sitharaman emphasized the government’s commitment to reducing the tax burden on middle-income earners while ensuring a progressive structure for higher incomes. This major reform is designed to boost disposable income, encourage spending, and stimulate economic growth amid ongoing economic challenges.

Revised Income Tax Slabs:

• Rs.0 to Rs.4 lakh: No tax (0%)
• Rs.4 lakh to Rs.8 lakh: 5% tax
• Rs.8 lakh to Rs.12 lakh: 10% tax
• Rs.12 lakh to Rs.16 lakh: 15% tax
• Rs.16 lakh to Rs.20 lakh: 20% tax
• Rs.20 lakh to Rs.24 lakh: 25% tax
• Above rs.24 lakh: 30% tax

While announcing the reforms, Sitharaman stated, “Our aim is to simplify the tax system, provide relief to the middle class, and ensure fairness across income levels. This new structure will leave more money in the hands of people, driving consumption and growth.”

Experts have welcomed the changes, noting that the reduction in tax rates, especially for the middle-income bracket, will lead to increased consumer spending—a key factor in boosting the economy. The revised slabs also ensure that higher-income earners contribute proportionally more, maintaining fiscal balance.

These new tax slabs will come into effect from the next financial year. The government is expected to release detailed guidelines soon to assist taxpayers in understanding and transitioning to the new regime seamlessly.