BIG RELIEF! No Income Tax Up to ₹12 Lakh | Union Budget 2025 Highlights

Summary

The transcript announces a major change in the income tax structure, with a key highlight being no tax payable up to an income of 12 lakh rupees. It outlines new tax slabs, reducing the tax burden for middle-class taxpayers and stimulating household consumption, savings, and investment. Tax rebates and rate reductions will apply to different income levels, with specific benefits for individuals earning up to 12 lakh rupees. Examples are provided, showcasing tax reductions at various income levels. These proposals will result in a revenue forgoing of about 1 lakh crore in direct taxes and 2,600 crores in indirect taxes.

Takeaways

• 😀 No income tax is payable up to ₹12 lakh of income, which equals a monthly income of ₹1 lakh.
• 😀 The income tax limit for salaried taxpayers increases to ₹12.75 lakh due to a standard deduction of ₹75,000.
• 😀 Tax slabs have been revised across the board to benefit taxpayers, with reduced tax rates for the middle class.
• 😀 New tax rates: 0% for ₹0-₹4 lakh, 5% for ₹4-₹8 lakh, 10% for ₹8-₹12 lakh, 15% for ₹12-₹16 lakh, 20% for ₹16-₹20 lakh, 25% for ₹20-₹24 lakh, and 30% for income above ₹24 lakh.
• 😀 A tax rebate is provided for taxpayers earning up to ₹12 lakh, ensuring no tax is payable for them.
• 😀 The revised tax structure is designed to boost household consumption, savings, and investment.
• 😀 A taxpayer earning ₹12 lakh will receive a tax benefit of ₹80,000, which is 100% of the tax payable under the old system.
• 😀 A person earning ₹18 lakh will get a benefit of ₹70,000, reducing 30% of their tax liability.
• 😀 A taxpayer with an income of ₹25 lakh will get a tax benefit of ₹1,10,000, reducing their tax by 25%.
• 😀 The government will forgo approximately ₹1 lakh crore in direct taxes and ₹2,600 crore in indirect taxes due to these changes.

Q & A

What is the new income tax structure announced in the script?

The new income tax structure eliminates income tax for individuals with income up to 12 lakh rupees, with different tax rates applied across various income brackets. The tax rates are as follows: 0-4 lakh rupees: 0%, 4-8 lakh rupees: 5%, 8-12 lakh rupees: 10%, 12-16 lakh rupees: 15%, 16-20 lakh rupees: 20%, 20-24 lakh rupees: 25%, and above 24 lakh rupees: 30%.

What is the benefit for taxpayers with income up to 12 lakh rupees?

Taxpayers with income up to 12 lakh rupees will have no income tax payable due to a tax rebate and changes in the tax slab rates.

How does the new tax regime benefit middle-class taxpayers?

The new tax regime benefits middle-class taxpayers by reducing their tax burden, leaving more money in their hands. This, in turn, boosts household consumption, savings, and investments.

What is the total tax benefit for a taxpayer earning 12 lakh rupees?

A taxpayer earning 12 lakh rupees will get a tax benefit of 80,000 rupees, which is 100% of the tax payable under the existing tax rates.

How much tax benefit does a person earning 18 lakh rupees receive under the new regime?

A person earning 18 lakh rupees will receive a tax benefit of 70,000 rupees, which is 30% of the tax payable under the existing rates.

What tax benefit does a person earning 25 lakh rupees get?

A person earning 25 lakh rupees will receive a tax benefit of 1 lakh 10,000 rupees, which is 25% of the tax payable under the existing rates.

What additional income is excluded from the new tax slab rates?

Special rate income, such as capital gains, is excluded from the new tax slab rates and is treated separately.

How much revenue is expected to be forgone due to the tax proposals?

The proposals are expected to result in a revenue forgone of about 1 lakh crore in direct taxes and 2,600 crore in indirect taxes.

How will the standard deduction impact salaried taxpayers?

The standard deduction of 75,000 rupees will increase the income limit for salaried taxpayers, resulting in a higher exemption threshold. This raises the limit for salaried taxpayers to 12.75 lakh rupees.

What is the rationale behind reducing taxes for the middle class?

The rationale is to reduce the financial burden on the middle class, allowing them to have more disposable income, which can lead to increased consumption, savings, and investments in the economy.