The Central Board of Direct Taxes (CBDT) has highlighted key progress made in delivering income-tax relief to the middle class under the new tax regime , as part of the Union Budget promises for FY 2025-26.
As per the official announcement, no income tax is payable on income up to Rs 12 lakh under the new tax regime, excluding special rate incomes such as capital gains.
For salaried taxpayers, the effective tax-free income limit increases to Rs 12.75 lakh , after factoring in the standard deduction of Rs 75,000.
Revised Income Tax Slabs Under New Tax Regime
The CBDT infographic outlines the revised slab structure applicable under the new tax regime:
- Income up to Rs 4 lakh - Nil
- 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%
Progress Achieved So Far
According to the CBDT, the effective tax-free income threshold has now reached Rs 12.75 lakh , offering significant relief to middle-income earners. The tax slabs have been rationalised , resulting in lower effective tax rates across income levels .
Additionally, marginal relief has been provided to taxpayers whose income slightly exceeds the Rs 12 lakh threshold, ensuring that a small increase in income does not lead to a disproportionately higher tax burden.
The announcement reinforces the government's focus on simplifying the tax structure , improving compliance, and providing tangible relief to the middle class through the new tax regime.
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