Finance Minister Nirmala Sitharaman, in her Union Budget 2025 speech, announced a major relief for taxpayers by raising the tax exemption limit to Rs 12 lakh under the new income tax regime. This means individuals earning up to Rs 12 lakh per annum will not have to pay any income tax, a move aimed at easing the financial burden on the middle class and boosting disposable income.
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Additionally, Sitharaman introduced revisions to income tax slabs to make taxation more progressive. Individuals earning up to Rs 25 lakh will now benefit from tax savings of up to Rs 1.1 lakh. With the inclusion of the standard deduction, the tax-free income threshold extends to Rs 12.7 lakh. The revised structure is expected to provide significant relief to salaried employees and self-employed individuals while also encouraging higher savings and spending, ultimately benefiting the economy.
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