New Delhi: In a major relief for taxpayers, Finance Minister Nirmala Sitharaman announced a new income tax structure in the Union Budget 2025-26, eliminating income tax for individuals earning up to ₹12 lakh annually under the new tax regime. For salaried taxpayers, this limit will be ₹12.75 lakh, factoring in a standard deduction of ₹75,000.
The Finance Minister emphasized that these tax revisions reaffirm the government’s commitment to easing the financial burden on the middle class while promoting economic growth. “The new structure will substantially reduce taxes for the middle class, leaving more money in their hands, boosting household consumption, savings, and investment,” Sitharaman stated in Parliament.
Revised Tax Slabs Under New Regime:
- ₹0 – ₹4 lakh: No tax
- ₹4 – ₹8 lakh: 5%
- ₹8 – ₹12 lakh: 10%
- ₹12 – ₹16 lakh: 15%
- ₹16 – ₹20 lakh: 20%
- ₹20 – ₹24 lakh: 25%
- Above ₹24 lakh: 30%
These revised slabs are expected to provide significant tax relief, making compliance easier and reducing tax disputes. The Finance Minister highlighted that the new tax structure aligns with the government’s philosophy of “trust first, scrutinize later,” ensuring a fair and transparent taxation system.
Sitharaman also reiterated that taxation reforms are a key step toward realizing the vision of Viksit Bharat and emphasized that the new income tax bill will uphold the principles of justice (Nyaya) while making tax administration simpler and more predictable.
