Budget 2025: No income tax payable on income up to Rs 12 lakh under new regime

Finance Minister Nirmala Sitharaman on Saturday announced that there would be no income tax payable for income up to Rs 12 lakh per annum under the new regime.

The limit would be Rs 12.75 lakh for salaried taxpayers considering the standard deduction of Rs 75,000, Sitharaman said in her Union Budget speech for the financial year 2025-’26.

The current exemption is for income up to Rs 7 lakh per year, a level set in 2023.

The finance minister said that the income tax slabs were being changed across the board.

“To taxpayers up to Rs 12 lakh of normal income [other than special rate income such as capital gains] tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them,” she said in her Budget speech.

The finance minister said that the new structure will help “reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment”.