New Delhi:
The government today cut personal income tax rates for some sections of taxpayers in a bid to boost consumption. Currently, under the system introduced in 2020, annual income of up to Rs 15 lakh is taxed at a rate between 5 per 20 per cent, while income of more than Rs 15 lakh is taxed at 30 per cent.
Under the new income tax slabs, Finance Minister Nirmala Sitharaman announced that annual income up to Rs 12 lakh will no longer be taxed.
Here are the frequently asked questions (FAQs) released by the government:
What is the new regime?
New regime provides for concessional tax rates and liberal slabs. However, no deductions are allowed in the new regime (other than those specified for e.g. 80JJAA, 80M, standard deduction).
What are the tax slabs in the earlier new regime?
Up to Rs 3 lakh – no tax
Rs 3-7 lakh – 5 per cent
Rs 7-10 lakh – 10 per cent
Rs 10-12 lakh – 15 per cent
Rs 12-15 lakh – 20 per cent
Above Rs 15 lakh – 30 per cent
What are the new slabs in the proposed new regime introduced by Finance Bill, 2025?
Up to Rs 4 lakh – 0 per cent
Rs 4-8 lakh – 5 per cent
Rs 8 12 lakh – 10 per cent
Rs 12-16 lakh – 15 per cent
Rs 16-20 lakh – 20 per cent
Rs 20-24 lakh – 25 per cent
Above Rs 24 lakh – 30 per cent
What is the tax benefit for different category of taxpayers (0-Rs 24 lakh)
What is the maximum total income for which tax liability for individual taxpayers is NIL?
In the proposed new tax regime, the maximum total income for which tax liability for individual taxpayers is NIL is Rs 12 lakh.
To claim benefit of NIL tax liability, what are the steps required to be taken?
The benefit of no tax liability is available only in the new tax regime. This new tax regime is the default regime. To avail the benefit of rebate allowable under the proposed provisions of the new tax regime, only return is to be filed otherwise no other step is required to be taken.
How will a person who has an income Rs 12 lakh benefit from new rates?
Any individual earlier was required to pay a tax of Rs 80,000 for an income of Rs 12 lakh. Now no tax will be charged.
Whether the limit of total income for NIL tax payments has increased in this budget?
Yes, the limit of total income for no tax payments in the new tax regime has been increased to Rs 12 lakh in this budget, provided taxpayers file ITR to avail the rebate.
Is the standard deduction on salary available in the new regime?
Yes, a standard deduction of Rs 75,000 is available to taxpayers in the new regime. So, a salaried taxpayer will not be required to pay any tax where his or her income before standard deduction is less than or equal to Rs 12.75 lakh.
Whether standard deduction is available in the old regime?
Standard deduction of Rs. 50,000 is available in the old regime.
How many taxpayers will benefit from the new rates and slabs?
Presently, for 2024-25, about 8.75 crore people have filed their income tax returns. All such people who were paying tax in the new tax regime will benefit from the change in rates and slabs.