Good News Taxpayers: How Much Taxes Will Be Saved On Rs 13 Lakh, Rs 15 Lakh, Rs 20 Lakh, Rs 25 Lakh Income?

Good News Taxpayers: How Much Taxes Will Be Saved On Rs 13 Lakh, Rs 15 Lakh, Rs 20 Lakh, Rs 25 Lakh Income?

Income Tax Budget 2025: One of the major good news that Finance Minister Nirmala Sitharaman announced during her eighth Budget speech was hefty tax reliefs to middle-class individuals. Right from announcing zero tax rates to income of up to Rs 12 lakh to rationalisation of TDS and TCS on savings and investments. FM also revised income tax rates under the new regime. All in all, the Budget reforms for taxpayers were meant to reduce the burden and give the opportunity to hold more money in hand for better living. But what happens when a salaried individual is earning up to Rs 13 lakh, Rs 15 lakh, Rs 20 lakh and Rs 25 lakh income?

Budget 2025 Income Tax Benefits:

FM said in her speech, “Slabs and rates are being changed across the board to benefit all tax-payers. The new structure will substantially reduce the taxes of the middle class and leave more money in their hands, boosting household consumption, savings and investment.”

To taxpayers, FM announced that up to Rs 12 lakh of normal income, tax rebate is being provided in addition to the benefit due to slab rate reduction in such a manner that there is no tax payable by them.

In simple words, a taxpayer will not have to pay any taxes on his or her income of up to Rs 12 lakh, which eventually would lead to a tax benefit of Rs 80,000.

But that is not all, even taxpayers who have an income of Rs 12.75 lakh will be tax-free. How? No tax rates till Rs 12 lakh income + Rs 75,000 standard deduction applied will make salaried individuals with Rs 12.75 lakh income free from the tax burden.

Furthermore, FM modified tax rates under the new regime.

Here are the new rates in the new regime:

– Up to Rs 4 lakh income – NIL

– More than Rs. 4 Lakh to Rs.8 Lakh – 5% Rate

– More than Rs. 8 Lakh to Rs. 12 Lakh – 10% Rate

– More than Rs. 12 Lakh to Rs. 16 Lakh – 15% Rate

– More than Rs. 16 Lakh to Rs. 20 Lakh – 20% Rate

– More than Rs. 20 Lakh to Rs. 24 Lakh – 24% Rate

– Income more than Rs. 24 lakh – 30% rate.

The proposed new rates under the new tax regime come as a big booster because earlier tax exemption was levied to Rs 3 lakh which has been increased to Rs 4 lakh, while rates have been revised alongside modification in income slabs.

Before Budget, New Regime Tax Rates Were:

– Up to Rs 2.5 Lakh – NIL

– Rs 2.5 Lakh To Rs 3 Lakh – NIL

– Rs 3 Lakh To Rs 7 Lakh – 5% (Rebate under Section 87A up to Rs 7 lakh)

– Rs 7 Lakh To Rs 10 Lakh – 10% Rate

– Rs 10 Lakh To Rs 12 Lakh – 15% Rate

– Rs 12 Lakh To Rs 15 Lakh – 20% Rate

– Above Rs 15 Lakh – 30% Rate.

Accordingly, Choice Broking highlighted that tax benefits by revised slab rate can be summarised as below:

income tax rates 1738563411 - Good News Taxpayers: How Much Taxes Will Be Saved On Rs 13 Lakh, Rs 15 Lakh, Rs 20 Lakh, Rs 25 Lakh Income?

(Table Is Attributed To Choice Broking)

Data from Choice Broking highlighted that there is a total tax benefit of Rs 25,000 on Rs 13 lakh income, while the benefit is higher by Rs 35,000 on Rs 15 lakh income, and further by Rs 90,000 on Rs 20 lakh income. On Rs 25 lakh income, the tax benefit comes to around Rs 1,10,000 under the revised tax rates in the new regime compared to the tax rates that were before Budget 2025 in the same regime.

Parveen Kumar, Partner – Direct Tax at Dewan P N Chopra & Co said, Finance Minister Nirmala Sitharaman highlighted the government’s decade-long efforts in implementing tax reforms to enhance taxpayer convenience. Key measures include faceless assessment, the taxpayer charter, and faster processing of returns, with nearly 99% of returns being based on self-assessment. Reaffirming the tax department’s approach of “trust first, scrutinize later,” she emphasized the continued commitment to easing compliance.

While Abhishek Sharma, Transaction Tax & Regulatory Services, Dewan P N Chopra & Co said, the new income tax bill is designed to be clear and direct in its language, ensuring simplicity and ease of understanding for both taxpayers and tax administrators. Its straightforward text aims to eliminate confusion, making it more accessible and user-friendly for all stakeholders involved.

Moreover, Rushabh Gandhi, MD & CEO at IndiaFirst Life said, the reduction in tax structure is expected to increase disposable income and savings, benefiting the insurance sector as insurance awareness grows. Although the shift to the new tax regime may impact life insurers due to the loss of Section 80C tax benefits, the positive effect of higher disposable income is expected to offset this impact.

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Original news source Credit: www.goodreturns.in

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