The announcement in the Budget 2025 that no income tax will be payable on annual incomes of up to Rs 12 lakh under the new tax regime has certainly grabbed attention. This is a major relief for many taxpayers, as it increases the income threshold before taxes are applied. Here's a quick breakdown of the new, proposed tax regime for FY 2025-26:
Key Highlights:
1. Income Tax Exemption up to Rs 12 Lakh: In the new tax regime, individuals earning up to Rs 12 lakh annually will not be liable to pay income tax. This is a significant move that could benefit the middle-class segment, as it brings more income under tax relief.
2. Tax Rates for Incomes above Rs 12 Lakh:
Rs 12 lakh to Rs 15 lakh: Likely a reduced rate (specific details to be confirmed, but it could be in the range of 10%-15%).
Above Rs 15 lakh: The tax rate will likely remain as per the previous slabs or with slight modifications, but the idea is that higher earnings will still be taxed at higher rates.
3. Simplified Regime: The new tax regime seems focused on simplification, with fewer exemptions and deductions, but the overall lower tax burden for those earning less should make it more accessible and user-friendly.
How to Calculate Tax under the New Regime:
1. Up to Rs 12 Lakh Income: No tax liability.
2. Rs 12 Lakh to Rs 15 Lakh: Likely taxed at 10%-15%.
3. Above Rs 15 Lakh: Tax rates may apply depending on the final details announced.
If you'd like, I can calculate an estimate of the tax you would pay based on your annual income. Do you have a specific income amount in mind, or would
you like a sample calculation?
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