Nirmala Sitharaman has announced the New Tax Regime slabs, from FY 2025-26 no income tax will be payable on annual income of up to Rs 12,00,000. Read this article for income tax calculation.
New Tax Regime
On 1st February 2025, the financial minister Nirmala sitharaman has announced the new tax regimes slab under the new regime for benefit of middle class tax payers. For the financial year 2025-26 there would be no income tax for income up to Rs 12 lakh. The tax slabs and rates are being revised in such a way that taxpayers earning up to Rs 12 lakh will not have to pay any taxes. In this blog we will walk you through new tax region calculation.
The Income Tax slabs under the new tax regime for financial year 2025-26 will come into effect from 1 April 2025. Under the, new tax regime a tax rebate of Rs 60,000 will be provided to people earning upto Rs 12 lakh per annum. The salaried tax payers will get a standard detection of Rs. 75,000.
In simple words a person having an average income of Rs 1,00,000 per month other than special rate income such as capital gain will not need to pay income tax.
New Tax Regime Slabs
As per Financial Minister announcement individual earning Rs 12,75,000 will get the standard deduction of Rs. 75,000, hence zero income tax pay. The income up to Rs. 4 lakh would be tax free, individual having income between Rs 4 to 8 lakh would be 5% tax rate, income of Rs 8 to 12 lakh be 10% tax, Rs 12 – 16 lakh would host 15% tax, Rs 16 – 20 lakh 15%, Rs. 20 – 24 lakh 25% and income above 24 would host 30% tax. Check the new tax regime slabs below.
| Income range (₹) | Tax rate |
| 0 – 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% |
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How will the New Slabs and Rate benefit
The tax payer will get a good benefit with the new tax Regime slab. For those individual whose income is up to Rs 12 lakh the tax rebate will increase along with the slab rate reduction. By combining both it will confirm that there is no income tax up to Rs 12 lakh. For more detail explanation you can check the table given below.
| Income Range | Tax rate | Tax Amount |
|---|---|---|
| ₹0 – ₹4,00,000 | Rs. 0 | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 |
| Total tax | ₹60,000 |
If your salary lies between 4 lakh the tax rate will be zero percent.
If you salary lies between 4 to 8 lakh then the tax rate will be 5% it means 4 lakh of 5% which is Rs. 20,000
If you income is 8 lakh to 12 lakh then the tax rate will be 10%, i.e., 8 lakh of 10% which is Rs. 40,000
Hence the total tax for income up to 12 lakh is Rs. 60,000 and as per the government will provide the rebate of 75,000.
So that no tax pay up to salary of Rs. 12 lakh.
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How Much Tax will Save in New Tax Regime
According to the Nirmala sitaraman speech, the taxpayer in the new tax regime with a income of 12 lakh will get a benefit of 80,000 in the tax payment.
| Gross taxable income | Current Income Tax payable | Purposed Income Tax payable | Income Tax saved after budget 2025 |
| Rs 12,75,000 | Rs 83,200 | 0 | Rs 83,200 |
| Rs 15 lakh | Rs 1,30,000 | Rs 97,500 | Rs 32,500 |
| Rs 16 lakh | Rs 1,53,400 | Rs 1,13,100 | Rs 40,300 |
| Rs 20 lakh | Rs 2,78,200 | Rs 1,92,400 | Rs 85,800 |
| Rs 24.75 lakh | Rs 4,26,400 | Rs 3,12,000 | Rs 1,14,400 |
| Rs 5 lakh | Rs 4,34,200 | Rs 3,19,800 | Rs 1,14,400 |
FAQs on New Tax Regime
Is there is no income tax up to Rs 12 lakh?
Yes, as per new Income Tax regime a person’s income up to 12 there would be no income tax.
How does the new tax Regime benefits salaried individual?
Salary individual can benefit from Standard deduction of Rs. 75,000 Under The new regime. This means that income up to Rs 12, no Income Tax is payable.