No Income Tax For Those Earning Up To Rs 12 Lakh: FM Nirmala Sitharaman’s Mega Budget Relief

Last Updated: February 01, 2025, 14:35 IST

Budget 2025: The revenue tax obligation exception restriction in 2005 was Rs 1 lakh, which was raised to Rs 2 lakh in 2012. In 2014, the exception restriction was increased to Rs 2.5 lakh, to Rs 5 lakh in 2019, to Rs 7 lakh in …Read More

In significant alleviation for the center course, financing preacher Nirmala Sitharaman in the Budget 2025 revealed on Saturday stated those making as much as Rs 12 lakh will certainly not have pay revenue tax obligation, also as the pieces listed below the revenue brace stay.

Also, those making as much as Rs 13 lakh will successfully currently be able save revenue tax obligation as over the Rs 12 lakh revenue restriction, there is a basic reduction of Rs 75,000, and a limited alleviation of about Rs 30,000.

The tax obligation pieces in the brand-new routine will certainly be as adheres to:

• Zero to Rs 4,00,000: No Tax
• Rs 4,00,000 to Rs 8,00,000: 5%
• Rs 8,00,0001 to Rs 12,00,000: 10%
• Rs 12,00,001 to Rs 16 lakh: 15%
• Rs 16,00,001 to Rs 20 lakh: 20%
• Rs 20,00,001 to Rs 24 lakh: 25%
• Above Rs 24 lakh: 30%

To tax obligation payers as much as Rs 12 lakh of regular revenue (besides unique price revenue such as resources gains), tax obligation refund is being offered along with the advantage as a result of piece price decrease in such a way that there is no tax obligation payable by them.

A tax obligation payer in the brand-new routine with a revenue of Rs 12 lakh will certainly obtain an advantage of Rs 80,000 in tax obligation (which is 100% of tax obligation payable according to existing prices). An individual having revenue of Rs 18 lakh will certainly obtain an advantage of Rs 70,000 in tax obligation (30% of tax obligation payable according to existing prices).

Those with a revenue of Rs 25 lakh will certainly obtain an advantage of Rs 1.1 lakh (25% of his tax obligation payable according to existing prices).

Tax exception will certainly cause Rs 1 lakh crore in straight tax obligations and Rs 2,600 crore of indirect tax obligation to be inescapable.

The revenue tax obligation exception restriction in 2005 was Rs 1 lakh, which was raised to Rs 2 lakh in 2012. In 2014, the exception restriction was increased to Rs 2.5 lakh, to Rs 5 lakh in 2019, to Rs 7 lakh in 2023 and currently to Rs 12 lakh in 2025.

OTHER DIRECT TAX OBLIGATION PROPOSITIONS

• EASE OF DOING BUSINESS: In addition to the personal tax reforms with focus on middle class, the government has announced introduction of a scheme to determine arm’s length price of international transaction for a block period of three years. The FM also announced expansion of scope of safe harbour rules to reduce litigation and provide certainty in international taxation.
• RATIONALISATION OF TDS/TCS: Tax deduction limit for senior citizens doubled from Rs 50,000 to Rs 1 lakh. The annual limit of Rs 2.40 lakh for TDS on rent increased to Rs 6 lakh.
• VOLUNTARY COMPLIANCE: Extension of time-limit to file updated returns, from the current limit of two years, to four years.
• REDUCING COMPLIANCE BURDEN: Reduced compliance for small charitable trusts/institutions by increasing their period of registration from 5 years to 10 years. Tax payers to be allowed to claim the annual value of two self-occupied properties (previously one) without any conditions (previously conditions attached).
• EMPLOYMENT AND INVESTMENT: Tax certainty for electronics manufacturing schemes. Tonnage tax scheme for inland vessels. Extension for incorporation by five years of start-ups. Specific benefits to ship-leasing units, insurance offices and treasury centres of global companies which are set up in IFSC. Certainty of taxation to Category I and category II AIFs, undertaking investments in infrastructure and other such sectors, on the gains from securities

EIGHTH CONSECUTIVE BUDGET

Sitharaman on Saturday made history as she presented a record eighth consecutive budget, which comes in the backdrop of slowdown in economy and demand for tax cuts for middle class. This will take Sitharaman closer to the record of 10 budgets that were presented by former Prime Minister Morarji Desai over different time periods. Desai has presented a total of six budgets during his tenure as finance minister from 1959 to 1964, and four budgets between 1967 and 1969.

Sitharaman on Saturday called on President Droupadi Murmu before presenting the Budget in the Lok Sabha. As per established tradition, the finance minister met the President at the Rashtrapati Bhavan before heading to Parliament.

President Murmu offered ‘dahi-chini’ (curd-sugar), considered auspicious, to Sitharaman before she left for Parliament to present the Union Budget.

Before the actual presentation in Parliament, the Cabinet headed by Prime Minister Narendra Modi approved the Budget for fiscal 2025-26 (April 2025 to March 2026).

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