Union Budget 2025: Zero Tax for Income Up to ₹12.75 Lakh Under New Regime
📢 Key Change: Zero tax for income up to ₹12.75 lakh (including ₹75k standard deduction) under new regime
Revised Tax Slabs (FY 2025-26)
| Annual Income | New Regime Tax Rate | Old Regime Tax Rate |
|---|---|---|
| Up to ₹4 lakh | 0% | 0% (up to ₹2.5 lakh) |
| ₹4-8 lakh | 5% | 5% (₹2.5-5 lakh) |
| ₹8-12 lakh | 10% | 20% (₹5-10 lakh) |
| ₹12-16 lakh | 15% | 30% (Above ₹10 lakh) |
| ₹16-20 lakh | 20% | - |
| ₹20-24 lakh | 25% | - |
| Above ₹24 lakh | 30% | 30% |
Who Benefits Most?
| Income Group | New Regime Benefit | Old Regime Advantage |
|---|---|---|
| Up to ₹12.75 lakh | ✅ Zero tax liability | ❌ Limited benefits |
| ₹15-20 lakh | ✅ 20-25% lower tax | ✅ Better with deductions >₹5 lakh |
| Above ₹24 lakh | ✅ Simplified filing | ✅ Saves ₹1.35L+ with tax perks |
Tax Calculation Examples
| Annual Income | New Regime Tax | Old Regime Tax | Savings |
|---|---|---|---|
| ₹12 lakh | ₹0 | ₹80,000 | ✅ ₹80,000 |
| ₹15 lakh | ₹97,500 | ₹49,400 | ❌ Old regime better |
| ₹25 lakh | ₹3.3 lakh | ₹4.4 lakh | ✅ ₹1.1 lakh |
Key Features Comparison
| Feature | New Regime | Old Regime |
|---|---|---|
| Standard Deduction | ₹75,000 | ₹50,000 |
| Deductions (80C, HRA, etc.) | ❌ Not allowed | ✅ Allowed |
| Rebate Limit | ₹12 lakh | ₹5 lakh |
| Best For | Simple filing, no investments | Tax planning with investments |
Should You Switch?
- ✔️ Choose New Regime if: You don't make tax-saving investments or claim HRA
- ✔️ Stick to Old Regime if: You can claim deductions >₹5 lakh annually
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