Key Budget Announcement
Income Tax Exemption Limit Increased to ₹12 Lakh
New Delhi: In a major relief for salaried individuals and the middle class, the Union government has raised the income tax exemption limit in the latest budget.
Finance Minister Nirmala Sitharaman, during the budget presentation, announced that individuals earning up to ₹12 lakh annually will now be exempt from income tax under the new tax regime. When combined with the standard deduction, the total tax-free income limit rises to ₹12.75 lakh per year.
Major Tax Reforms Announced
Apart from the increased exemption limit, the government has introduced key changes to benefit taxpayers:
- Higher TDS Limit on Interest Income: The current TDS limit of ₹50,000 has been doubled to ₹1 lakh.
- Higher Exemption for Senior Citizens on Rental Income: The tax exemption limit on rental income for senior citizens has been increased from ₹2.4 lakh to ₹6 lakh annually.
New Income Tax Slabs Under the Revised Regime
The government has introduced new tax slabs, offering lower tax rates for various income groups:
- Up to ₹4 lakh – No tax
- ₹4 lakh to ₹8 lakh – 5%
- ₹8 lakh to ₹12 lakh – 10%
- ₹12 lakh to ₹16 lakh – 15%
- ₹16 lakh to ₹20 lakh – 20%
- ₹20 lakh to ₹24 lakh – 25%
- Above ₹24 lakh – 30%
Impact of the Tax Reforms
These tax changes are expected to benefit millions of taxpayers by increasing disposable income, boosting savings and investments, and providing financial relief to the working class. The revised tax slabs aim to simplify tax filing while ensuring fair contributions across income groups.
This announcement has been welcomed by taxpayers and financial experts, who believe the changes will stimulate economic growth by enhancing spending capacity among middle-class households.