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Union Budget 2025 Income Tax Slabs

As Budget 2025 nears, taxpayers expect key tax reforms: Higher Tax Slabs (30% rate may start at ₹18L), Increased Deductions (₹2L under 80C, ₹3L on home loan interest), and Simpler Tax Filing to ease compliance.

By Vijay Yadav
New Update
Union Budget 2025 Income Tax Slabs

In the Union Budget 2025, Finance Minister Nirmala Sitharaman introduced significant changes to India's income tax structure, aiming to provide relief to the middle class and stimulate economic growth. The Union Budget 2025 introduces a new tax regime aimed at reducing the tax burden for middle-class families.

Latest Update on Budget 2025: Nirmala Sitharaman Says Will Introduce New Income Tax Bill Next Week

Here are the new income tax slabs as per the FM's announcements: 

  • 0-4 nil
  • 4-8 – 5%
  •  8-12 – 10%
  • 12-16 -15%
  •  16-20 -20%
  • 20-24 – 25%
  • Above – 30%

Union Budget 2025 Expectations

As news going on upcoming uncion budget can provide significant relief to salaried individuals and the middle class. As expected increasment in the tax-free income threshold.

Tax Incentives for Savings and Investments

Income Existing tax rates Proposed tax rates
₹5–10 lakh 20% 15%
₹10–15 lakh 30% 25%
Raising it to ₹75,000 under the old tax regime and ₹1,00,000 under the new tax regime would offer substantial relief to salaried individuals. Budget 2025 could include tax incentives for middle-class taxpayers who invest in retirement plans, health insurance, or home loans. Allowing a higher deduction under section 80C or introducing new exemptions for long-term investments could offer additional financial relief while promoting savings and investments.
Corporate Tax Updates: Include changes for MSMEs and startups
Update soon! 

Old and New Tax Regimes

In Budget 2025, the government could aim to harmonise the tax slabs and rates across both regimes to create more consistency. Will provide incentives for savings and investments. 

How much income is tax-free currently in the new regime?

Salaried individuals earning up to ₹7.75 lakh have to pay no tax due in the new tax regime to the availability of a standard deduction of ₹75,000 and the rebate available under section 87A of the Income-tax Act, 1961.

Union Budget 2024 Income Tax - Key Highlights

  1. Revised Income Tax Slabs:

    • The income tax slabs under the new tax regime were restructured to offer savings of up to ₹17,500 for taxpayers.
  2. Increased Standard Deduction:

    • The standard deduction for salaried individuals was increased by 50%, raising it to ₹75,000.
  3. Comparison Between New and Old Tax Regimes:

    • The new tax regime now offers lower tax rates compared to the old regime, making it more beneficial for many taxpayers.

These reforms are expected to influence the deductions and exemptions taxpayers can claim when filing their income tax returns in July 2025.

The government's intent behind these adjustments is to address the impact of inflation and boost consumption across the economy.

Know more about the Union Budget - Financial Year 2025-2026