New Delhi: In a landmark announcement during the Union Budget 2025-26, Finance Minister Nirmala Sitharaman unveiled a series of major reforms to the income tax structure under the new tax regime. The changes promise significant relief for taxpayers across various income brackets, with a particular focus on middle-class and higher-income groups.
One of the most notable revisions is the complete exemption of income tax for individuals earning up to Rs 12 lakh annually. This move translates into savings of Rs 80,000 per year compared to the previous system. Salaried employees stand to benefit even more, with the exemption threshold effectively rising to Rs 12.75 lakh when the Rs 75,000 standard deduction is included.
Union Budget 2025-26: Increased savings for higher earners
Taxpayers with incomes beyond Rs 12 lakh will also enjoy substantial savings. Individuals earning Rs 24 lakh or more annually will save Rs 1.10 lakh, while those in other brackets will see incremental benefits. Here’s a closer look at the savings across income levels:
| Income (Rs) | Savings (Rs) |
| 13 lakh | 25,000 |
| 14 lakh | 30,000 |
| 15 lakh | 35,000 |
| 16 lakh | 50,000 |
| 17 lakh | 60,000 |
| 18 lakh | 70,000 |
| 19 lakh | 80,000 |
| 20 lakh | 90,000 |
| 21 lakh | 95,000 |
| 22 lakh | 1,00,000 |
| 23 lakh | 1,05,000 |
Revised tax slabs as per the latest budget: A simplified system
| Income Range (Rs) | Tax Rate (%) |
| Up to Rs 4 lakh | 0% |
| 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% |
Budget 2025: Move toward simplicity and economic growth
The Finance Minister emphasized that these changes aim to simplify the tax system and encourage more taxpayers to transition to the new regime. By reducing liabilities across income groups, the government hopes to boost disposable income, which in turn could stimulate economic growth. Analysts have lauded the reforms as a consumer-friendly step that aligns with India’s broader economic goals. With this initiative, the government aims to balance taxpayer relief with a streamlined and transparent tax framework.
Union Budget 2025 Announcements by FM Nirmala Sitharaman: The Union Budget 2025-26 introduced major income tax reforms, offering relief to taxpayers. Incomes up to Rs 12 lakh (Rs 12.75 lakh with standard deduction) are fully exempt, while higher earners also benefit. The reforms aim to stimulate economic growth. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
