No income tax till Rs 12 lakh: Here’s how much you’ll pay under the new regime; Check new slabs

Finance Minister Nirmala Sitharaman’s Budget 2025 landed with a bang—and the middle class is loving it. In a move that’s set to bring major relief for the middle, she announced that there will be o income tax payable up to Rs 12 lakh under the new regime. For millions of taxpayers, this isn’t just good news—it’s a game-changer.

Recognizing the backbone of India’s economy, Sitharaman stated, “The middle class provide strengths to the economy. In recognition of their contribution, we have periodically reduced the tax burdens.” This budget takes that commitment to the next level, slashing tax liabilities for salaried individuals and small business owners alike.

Here’s the new tax slab breakdown under Budget 2025:

• Rs 0–Rs 4 lakhs: NIL
• Rs 4–Rs 8 lakhs: 5%
• Rs 8–Rs 12 lakhs: 10%
• Rs 12–Rs 16 lakhs: 15%
• Rs 16–Rs 20 lakhs: 20%
• Rs 20–Rs 24 lakhs: 25%
• Above Rs 24 lakhs: 30%

This overhaul means that individuals earning up to Rs 12 lakh annually won’t pay a single rupee in income tax, a massive leap from previous thresholds. It’s a bold play aimed squarely at easing the financial pressure on India’s middle class, giving them more disposable income to spend, save, or invest.

While the wealthier brackets still carry heavier tax rates, the recalibration provides breathing room for middle-income earners, who’ve often felt squeezed by rising costs and stagnant exemptions. This shift isn’t just about tax cuts—it’s about acknowledging the pivotal role of the middle class in driving economic growth.