Budget 2025 big breaking: Zero income tax up to Rs 12 lakh under new tax regime

In a major announcement in the Union Budget 2025-26, the government has introduced a ‘nil tax’ slab for incomes up to ₹12 lakh under the new tax regime. For salaried taxpayers, the exemption extends to ₹12.75 lakh with the inclusion of the standard deduction of ₹75,000.

The revised structure aims to significantly reduce the tax burden on the middle class, increasing disposable income to stimulate household consumption, savings, and investment.

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Here’s the updated income tax slab under the new regime:

  • ₹0–4 lakh: Nil
  • ₹4–8 lakh: 5%
  • ₹8–12 lakh: 10%
  • ₹12–16 lakh: 15%
  • ₹16–20 lakh: 20%
  • ₹20–24 lakh: 25%
  • Above ₹24 lakh: 30%

This overhaul of the tax structure is designed to benefit a larger segment of taxpayers, providing more financial relief across income brackets.