DBT Bureau
Bengaluru, 1 February 2025
The Union Budget 2025 announced big measures for income tax payers as the budget proposed to exempt income tax for individual earners up to Rs 12 lakh per annum. As more than 80% of Indian tax payers earn less than Rs 12 lakh per annum, this move is expected to boost consumption in a big way, which has shown a visible slowdown past year.
Presenting the budget, Union Finance Minister Nirmala Sitharaman has announced a hike in tax rebate under Section 87A. Due to this hike, resident individuals having net taxable income up to Rs 12 lakh will pay zero tax.
“I propose to revise tax rate structures as follows: 0 to Rs 4 Lakhs – nil, Rs 4 Lakhs to Rs 8 Lakhs – 5%, Rs 8 Lakhs to Rs 12 Lakhs – 10%, Rs 12 Lakhs to Rs 16 Lakhs – 15%, Rs16 Lakhs to Rs 20 Lakhs – 20%, Rs 20 Lakhs to Rs 24 Lakhs – 25% and above Rs 24 Lakhs – 30%. To taxpayers up to Rs 12 Lakhs of normal income other than special rate income such as capital gains, a 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,” Nirmala Sitharaman said.
Income tax slabs (In Rs) Income tax rate (%)
Upto Rs 4 lakh Zero
Rs 4 lakh to Rs 8 lakh 5%
Rs 8 lakh to Rs 12 lakh 10%
Rs 12 lakh to Rs 16 lakh 15%
Rs 16 lakh to Rs 20 lakh 20%
Rs 20 lakh to Rs 24 lakh 25%
Above Rs 24 lakh 30%
Up to Rs 12 lakh, tax liability will be zero given the rebate provided up to this income level.
