Budget 2025 Income Tax Slabs : The Union Budget 2025 has introduced significant changes to the income tax structure, aiming to boost consumption and provide relief to taxpayers. Understanding the new income tax slabs and how they compare to the old regime is crucial for effective financial planning.
New Income Budget 2025 Income Tax Slabs
Finance Minister Nirmala Sitharaman announced a revised tax regime with the following income tax slabs:
- Annual Income up to ₹1.2 million: No tax
- Annual Income from ₹1.2 million to ₹1.5 million: 5%
- Annual Income from ₹1.5 million to ₹2 million: 10%
- Annual Income from ₹2 million to ₹2.5 million: 15%
- Annual Income from ₹2.5 million to ₹3 million: 20%
- Annual Income above ₹3 million: 30%
These adjustments are designed to increase disposable income for the middle class, thereby stimulating economic growth.
Comparison with the Old Tax Regime
The old tax regime remains available for taxpayers who prefer to claim deductions and exemptions. The slabs under the old regime are:
- Annual Income up to ₹2.5 lakh: No tax
- Annual Income from ₹2.5 lakh to ₹5 lakh: 5%
- Annual Income from ₹5 lakh to ₹10 lakh: 20%
- Annual Income above ₹10 lakh: 30%
While the old regime offers various deductions under sections like 80C, 80D, and others, the new regime provides lower tax rates without exemptions. Taxpayers must evaluate their financial situations to decide which regime is more beneficial. Budget 2025 Income Tax Slabs.
Impact on Taxpayers
The revised income tax slabs in Budget 2025 are expected to leave more money in the hands of taxpayers, encouraging spending and investment. For instance, individuals earning up to ₹1.2 million annually will now be exempt from paying income tax, a significant increase from the previous threshold. This change is anticipated to boost consumption, a critical component of India’s GDP.
Choosing Between the New and Old Regimes
Deciding between the new and old tax regimes depends on individual financial circumstances. Taxpayers who benefit significantly from deductions such as home loan interest, insurance premiums, and investments under Section 80C may find the old regime more advantageous. Conversely, those with fewer deductions might prefer the simplicity and lower rates of the new regime. Budget 2025 Income Tax Slabs.
Also Read : US Stock Market Crash: Nvidia, DeepSeek Stocks Plunge Amid Dow Jones, Nasdaq, S&P 500 Drop
Conclusion
Budget 2025 has introduced substantial changes to the income tax structure, with new slabs aimed at increasing disposable income and stimulating economic growth. Taxpayers should carefully assess their financial situations, considering factors like eligible deductions and overall tax liability, to choose between the new and old tax regimes effectively. Budget 2025 Income Tax Slabs.
By staying informed about the latest income tax slabs and understanding the differences between the new and old regimes, taxpayers can make strategic decisions that align with their financial goals.
