An attempt has been made to simplify the tax system with many important changes in the new Income Tax Bill 2025. Know how to get tax free on income up to Rs 12 lakh and what will be the changes compared to the old tax system?
Old VS New Tax Regime: To make the tax system in India simple and effective, the government has introduced the new Income Tax Bill 2025. The new rules will come into effect from April 1, 2026. In the new Income Tax Bill, section 115BAC of the old Income Tax Act 1961 will be removed and included in the new section 202. The purpose of this change is to make the income tax system more transparent and simple. Let us know what is special in this new bill.
New tax slabs and rates
Under the new Income Tax Bill, the income tax slabs and rates will be as follows:
Up to ₹4,00,000: No tax
₹4,00,001 to ₹8,00,000: 5%
₹8,00,001 to ₹12,00,000: 10%
₹12,00,001 to ₹16,00,000: 15%
₹16,00,001 to ₹20,00,000: 20%
₹20,00,001 to ₹24,00,000: 25%
₹24,00,000 or more: 30%
These slabs are in line with the new tax system announced by Finance Minister Nirmala Sitharaman in Budget 2025. Keep in mind that this new tax system is for those taxpayers who do not want to avail the exemptions and deductions of the old tax system.
Tax exemption up to Rs 60,000
There is another important provision in the new bill. Taxpayers with income up to Rs 12 lakh will get a tax exemption of up to Rs 60,000. This means that if your total income is up to Rs 12 lakh, then you will not have to pay any kind of tax.
Taxpayers who follow the old tax regime will get a rebate of up to Rs 12,500 on income up to Rs 5 lakh. This rebate will be given under section 156 which will be equally applicable in both tax systems.
