New Delhi, Feb 1: The big-ticket announcement by Finance Minister Nirmala Sitharaman regarding the income tax slab for an income up to Rs 12 lakh has brought wide cheers to the faces of the middle-class and taxpayers.
By bringing down their tax liability to nil, FM Sitharaman unveiled the bonanza at a time when they least expected it. However, these changes are applicable only to the New Tax Regime.
Under the proposed budgetary changes in Union Budget 2025-26, those with an income of up to Rs 12 lakh will no longer have to pay any income tax, a significant shift from the previous practice where they had to pay anywhere between Rs 60,000 – Rs 80,000.
“The New tax regime is the default regime. To avail benefits of the rebate allowable under proposed provisions of the new tax regime, only a return is to be filed otherwise no other step is required to be taken,” said an official release.
Also, there exists a standard deduction of Rs 75,000 available to taxpayers in the new regime. Therefore, a salaried taxpayer will not be required to pay any tax where his income before the standard deduction is less than or equal to Rs 12,75,000.
Below are some Q&As regarding new income tax slabs: What was the earlier income limit for nil tax? Earlier, the limit of income for nil tax payment was Rs 7 lakh. By increasing this limit to Rs 12 lakh, around one crore assesses who were earlier required to pay tax varying from Rs 20,000 to Rs 80,000 will now pay nil tax.
Who will benefit from changes in tax slabs? The new tax regime applies to a person, or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2. Accordingly, changes in tax slabs will benefit all these persons.
What benefits a taxpayer can avail? Any individual, who earlier was required to pay a tax of Rs 80,000 (in the new regime) for an income of Rs 12 lakh, will be required to pay nil tax on such income.
IANS