Budget 2025: No Tax Up to ₹12.75 Lakh for Salaried Class

In a landmark move, Finance Minister Nirmala Sitharaman announced that annual income up to ₹12 lakh will be exempt from income tax under the new tax regime. For salaried taxpayers, this threshold extends to ₹12.75 lakh after considering the standard deduction of ₹75,000.

New Tax Slab Structure

• Income up to ₹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% 

Direct Benefits to Taxpayers

• ₹12 lakh income: Tax saving of ₹80,000
• ₹18 lakh income: Tax saving of ₹70,000
• ₹25 lakh income: Tax saving of ₹1.10 lakh 

Key Changes in Tax Administration

• Tax returns filing window extended from 2 to 4 years for updated returns
• TDS limit for senior citizens doubled to ₹1 lakh from ₹50,000 
• Rental income TDS threshold increased to ₹6 lakh from ₹2.40 lakh
• TCS threshold for foreign remittances raised to ₹10 lakh from ₹7 lakh
• Education remittance TCS exempted when funded through specified financial institution loans 

New Tax Law Initiative

• Simpler, condensed tax law to replace 60-year-old legislation
• Focus on "Nyay" (justice) principle 
• "Trust first, scrutinize later" approach
• Current tax law volume to be halved 

Financial Impact

• Government to forgo ₹1 lakh crore in direct taxes
• Additional ₹2,600 crore reduction in indirect taxes
• Expected boost to household consumption and savings
• Benefits aimed at strengthening middle-class financial capacity 

Additional Benefits 

• Taxpayers can claim nil annual value for two self-occupied properties
• Nearly 90 lakh taxpayers have already updated their income voluntarily
• Almost 99% returns now processed through self-assessment
• Faceless assessment system continues to streamline process