A lot of great announcements came for the taxpayer during the budget speech of Finance Minister Nirmala Sitharaman. This is a real plus especially for the middle class.
In her budget speech, she stated that the common man contributes to India’s journey into development.
New Income Tax Bill Launched
The other significant clarification that the Finance Minister-Nirmala Sitharaman-made in Budget 2025.
In basic terms, a taxpayer whose taxable income is less than Rs 12 lakh will be completely exempt from income tax; however, in the event that the income exceeds Rs 12 lakh, the taxpayer would be liable to pay appropriation of taxes across all the slabs such as:-
0% from 0-4 lakhs,
5% from 4 to 8 lakhs,
10% from 8 to 12 lakhs,
15% from 12 to 16 lakhs,
20% from 16 to 20 lakhs,
25% from 20 to 24 lakhs,
30% above Rs. 24 lakhs.
Next week, find a new piece of law in Income tax. This measure would also ease income tax filing. Also, KYC shall become easy. Nirmala Sitharaman, Finance Minister, officially introduced the new slabs, stating that it has our middle class interests at heart.
Our only aim is to relieve working-class people from their daily burdens. Senior citizens will benefit tremendously from tax breaks. The TDS threshold for senior citizens has been increased to 1 lakh.
TCS was now increased from 7 lakh to 10 lakh, according to the Finance Minister.
When was there no income tax?
1 lakh in 2005,
2 lakh in 2012,
2.5 lakh in 2014,
5 lakh in 2019,
7 lakh in 2023,
12 lakh in 2025
Before the budget was presented, there were rumors that the administration wanted to push the new tax system as much as possible. There were also rumors that the income structure would alter.
It is said that changes to the tax rates under the new slab are also expected to happen. If this happens, people will have more money, and taxpayers would pay less in taxes.
How good has that tax slab fared until now?
There are presently two tax systems in use in the country. The two regimes are commonly referred to as the old tax system and the new tax regime. The new income tax system provides no exemption under section 80C. Thus, basically salaried persons demand that the resaving provisions be included on the exclusions list.
We, therefore, have good news, because Finance Minister Nirmala Sitharaman has increased the normal tax threshold to Rs 75,000 from Rs 50,000 under the new tax regime for Budget 2024.
Are the tax slabs as existing really the applicable taxes?
Income up to Rs 2.5 lakh is not taxable, while the income between Rs 2.5 lakh to Rs 5 lakh is taxed at a rate of 5%. Similarly, the tax rate for income between Rs 5 lakh up to Rs 10 lakhs is 20%, while that over Rs 10 lakhs faces a 30% tax.
Taxes and slabs that apply under the new tax system
Both tax exemptions are valid for 0% tax on income from Rs 0-Rs 3 lakh.The slab-wise rate of tax for income ranging between Rs 3 lakh to Rs 6 lakh is 5%. The slab of tax from Rs 6 lakh to Rs 9 lakh is 10%. From Rs 9 lakh to Rs 12 lakh, the slab of tax is at 15%. From Rs 12 lakh to Rs 15 lakh, taxes are 20%. Tax on income up to Rs 15 lakh is 30%.