Quick Summary
The government in Union Budget 2025 has introduced a simplified New Tax Regime, offering zero tax liability up to Rs. 12 lakh (i.e. average income of Rs.1 lakh per month other than special rate income such as capital gains)
Now, the new limit will be Rs.12.75 lakh for salaried tax payers, due to standard deduction amounting Rs. 75,000.
Income Tax Slabs Under New Regime
| Income Tax Slab | Income Tax Rate |
| 0-4 lakh | Nil |
| 4-8 lakh | 5% |
| 8-12 lakh | 10% |
| 12-16 lakh | 15% |
| 16-20 lakh | 20% |
| 20- 24 lakh | 25% |
| Above 24 lakh | 30% |
The total tax benefit of slab rate changes and rebate at different income levels can be illustrated in the table below:
By reducing taxes, the government aims to leave more disposable income in the hands of taxpayers, which can boost household consumption, savings, and investments, thereby contributing to economic growth.
FAQ :
Under the new tax regime for FY 2025-26, individuals have zero tax liability up to an income of ₹12 lakh per annum, which averages to ₹1 lakh per month, excluding special income like capital gains.
Salaried taxpayers benefit from a standard deduction of ₹75,000, which effectively raises the income limit for zero tax liability to ₹12.75 lakh per annum.
The income tax slabs are: 0-4 lakh (Nil), 4-8 lakh (5%), 8-12 lakh (10%), 12-16 lakh (15%), 16-20 lakh (20%), 20-24 lakh (25%), and above 24 lakh (30%).
The government aims to leave more disposable income in the hands of taxpayers, which is expected to boost household consumption, savings, and investments, thereby contributing to economic growth.
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