For the middle class, this is good news. To lessen the burden on all taxpayers, Finance Minister Nirmala Sitharaman has proposed updated tax slabs and rates under the new administration. Except for exceptional income, up to Rs 12 lakh in annual income will not be subject to taxes. Those who earn more than that will profit from the updated slabs starting in the upcoming fiscal year.

Tax Slabs For FY25-26

Up to 4 lakh rupees: nothing

Rs 4–8 lakh: 5%

10% of Rs 8–12 lakh

15% of Rs 12–16 lakh

20% of Rs 16–20 lakh

25% of Rs 20–24 lakh

30% over Rs 24 lakh

Tax Slabs For FY24-25

Until Rs 3 lakh: Nothing

Rs 3–7 lakh: 5%

10% of Rs 7–10 lakhs

Rs 10–12 lakh: 15%

Rs 12-15 lakh: 20%

30% above Rs 15 lakh

No Tax Up To Rs 12 Lakh

Under the new system, individuals making up to Rs 12 lakh a year will not be required to pay any income tax. Taxpayers earning up to Rs 12.75 lakh annually will pay no taxes when the standard deduction of Rs 75,000 is added.

The Finance Minister stated that the government believes the middle class can play a significant role in the development of the country and that the new structure will significantly lower middle class taxes and put more money in their hands, increasing household consumption, savings, and investment.

The new slabs will provide a benefit of Rs 80,000 for taxpayers with an annual income of Rs 12 lakh and Rs 70,000 for those with an income of Rs 18 lakh, Ms. Sitharaman informed the house. She stated that the government will forgo Rs 2,600 crore in tax suggestions and Rs 1 lakh crore in direct tax collection in order to provide the tax relief.