In a major boost for the middle class, Finance Minister Nirmala Sitharaman announced significant changes to the income tax structure in the Union Budget 2025. The most notable change is that there will be no income tax up to Rs 12 lakh under the new tax regime. This includes the standard deduction, which brings the limit to Rs 12.75 lakh. Revised Tax Slabs The new tax regime introduces revised slabs aimed at reducing the tax burden on individuals. These are as follows: Up to Rs 4 Lakh: No tax Rs […]
Big Tax Relief: No Tax Up to Rs 12 Lakh for Middle Class
In a major boost for the middle class, Finance Minister Nirmala Sitharaman announced significant changes to the income tax structure in the Union Budget 2025. The most notable change is that there will be no income tax up to Rs 12 lakh under the new tax regime. This includes the standard deduction, which brings the limit to Rs 12.75 lakh.
The new tax regime introduces revised slabs aimed at reducing the tax burden on individuals. These are as follows:
These revisions aim to provide middle-class taxpayers with substantial relief by lowering their tax burden. Sitharaman highlighted that these changes would increase household consumption, savings, and investment.
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Sitharaman also addressed senior citizens, proposing that the limit for tax deduction at source (TDS) for them would be doubled to Rs 1 lakh. This change is expected to benefit many elderly taxpayers, making the process simpler and less burdensome.
In another significant move, the government has extended the deadline to file updated income tax returns to four years. This extension will offer taxpayers more time to make necessary adjustments or corrections to their returns.
One of the most exciting announcements is the introduction of a new Direct Tax Code. This code aims to simplify compliance for individual taxpayers. Sitharaman confirmed that the new code will be unveiled next week. The goal is to make income tax laws easier to read and understand while reducing the length of the Income Tax Act of 1961 by up to 60%.
The tax relief provided by these changes is expected to significantly benefit the middle class. With the new tax slabs, individuals will pay less tax, allowing them to save more. This will likely encourage increased spending and investment, helping to boost the economy.
The new direct tax code, along with the proposed changes to the income tax slabs, marks a major step towards tax simplification. These reforms are designed to make tax filing easier, less time-consuming, and more beneficial for taxpayers across the country.
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