Income Tax: Due to the relief given by the Finance Minister to the taxpayers on the tax front, the tax burden on the middle class will be reduced, due to which they will have more money to spend.
Budget 2025: Finance Minister Nirmala Sitharaman has given a big relief to the taxpayers while presenting the first full budget for the eighth consecutive time and the third term of the Modi government. Under the new tax regime, those earning Rs 12 lakh annually will no longer have to pay any income tax. This will reduce the tax burden on the middle class, which will give them more money to spend. This will help in increasing domestic consumption savings and investment.
No tax on income up to Rs 12.75 lakh
Finance Minister Sitharaman has given a big relief to salaried pensioners through her budget. People who earn up to Rs 12 lakh annually will not have to pay any tax in the new financial year 2025-26. That is, income up to Rs 12 lakh has become tax-free. The relief is that taxpayers will continue to get the benefit of standard deduction of Rs 75000 annually in the new regime. That means taxpayers whose annual income is Rs 12.75 lakh will not have to pay any tax.
Big change in tax slab in new tax regime
Big change has been made in tax slab in new income tax regime. No tax will be payable on income up to Rs. 4 lakh. 5% tax will be payable on income up to Rs. 4 – 8 lakh, 10% on income up to Rs. 8 – 12 lakh, 15% on income up to Rs. 12 -16 lakh, 20% on income up to Rs. 16 – 20 lakh, 25% on income up to Rs. 20 -24 lakh and 30% on income above Rs. 24 lakh. Due to this change in tax slab, those having income between Rs. 8 lakh to Rs. 25 lakh will be able to save tax between Rs. 30000 to Rs. 1,10,000. Also, taxpayers whose annual income is Rs. 12 lakh will be able to save tax of Rs. 80000.
Tax deduction limit doubled for senior citizens
The Finance Minister has given a big gift to senior citizens. It has been announced to increase the TDS limit on interest for senior citizens. The TDS limit for senior citizens has been increased from the current Rs 50,000 to Rs 1 lakh. That is, the limit of TDS deducted on interest up to Rs 50,000 on FD in banks has been increased to Rs 1 lakh.
TDS limit on rent increased to Rs 6 lakh
The Finance Minister has increased the TDS limit on rent from the current level of Rs 2.40 lakh to Rs 6 lakh per annum. This will reduce the number of transactions for TDS. Also, the TDS liability of taxpayers who receive small payments will be reduced. Commenting on the tax-related announcements in the Finance Minister’s budget, Devan Gupta, Audit and Direct Tax Partner, Cretum Advisory, said, Budget 2025 is a budget to accelerate India’s growth with tax reforms. Removal of TCS on sales of goods will reduce cash-related concerns. The government has also promoted the Vivaad se Vishwas scheme to settle tax disputes, which will benefit about 33000 taxpayers. The new tax system has given major tax relief to individuals and businesses earning up to ₹ 12 lakh annually. These reforms will establish India as a global startup hub, attract foreign investments and facilitate ease of doing business and further economic growth.
