Union Budget 2025: All about income tax calculations

Finance Minister Nirmala Sitharaman presented the income tax in her eighth consecutive budget speech, enhancing the middle class’s prowess in increasing spending and consumption.

India’s Finance Minister, Nirmala Sitharaman, said the income tax changes will cost the government more than 1 trillion rupees in revenue. She presented the budget in her eighth consecutive budget speech on Saturday.

Nirmala Sitharaman announced the Union Budget 2025.

Nirmala Sitharaman announced the Union Budget 2025 on Saturday. She announced income tax slabs in her 8th consecutive budget speech to enhance the prowess of the middle class to increase their spending and consumption. She announced that those with salaries up to ₹12 lakh per year will not have to pay any income tax. Previously, the cap was ₹7 lakh per annum.

What tax slabs did Nirmala Sitharaman propose?

Presenting the Union Budget 2025, Sitharaman said, “I propose to revise tax rate structures as follows: 0 to ₹4 Lakhs – nil, ₹4 Lakhs to ₹8 Lakhs – 5%, ₹8 Lakhs to ₹12 Lakhs – 10%, ₹12 Lakhs to ₹16 Lakhs – 15%, ₹16 Lakhs to ₹20 Lakhs – 20%, ₹20 Lakhs to ₹24 Lakhs – 25% and above ₹24 Lakhs – 30%. To taxpayers up to ₹12 Lakhs of normal income other than special rate income such as capital gains, a 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.”

Who will pay zero income tax?

The government also detailed who would pay nil taxes under the new tax regime. According to the budget document, those with annual salaries of ₹8 lakh, ₹9 lakh, ₹10 lakh, ₹11 lakh, and ₹12 lakh will not pay any taxes. Those with salaries of ₹16 lakh, ₹20 lakh, ₹24 lakh, and ₹50 lakh will pay decreased amounts.

The Finance Minister announced other tax measures and reforms, which “will substantially reduce the taxes of the middle class and leave more money in their hands boosting household consumption, savings and investment.” She added, “We will endeavour to keep the fiscal deficit each year such that the central government debt remains on a declining path as a percentage of the GDP.”