Big Budget Boost For Middle Class: No Income Tax Up To Rs 12 Lakh

Keeping in view the relief to middle-class, there will be no income tax on income up to Rs 12 lakh, Finance Minister Nirmala Sitharaman announced in the Union Budget 2025. This move should free more cash for taxpayers, propping consumer household consumption, savings, and investment.

There are Some Key Highlights in the Announcement

Higher Rebate Limit: The limit of tax rebate for income has been increased from Rs 7 lakh to Rs 12 lakh. This implies that an annual income of up to Rs 12 lakh will not attract any income tax

New Tax Regime: There are revision of tax slabs under the new tax regime — nil tax on annual income of up to Rs 4 lakh, and 5% on Rs 4 lakh-8 lakh, 10% on Rs 8 lakh-12 lakh, and so on.

Tax Exemption: With the standard deduction of Rs 75,000 for salaried individuals, the derived income limit will be Rs 12.75 lakh where no tax is payable.

Higher Incomes also Save: The new tax structure will prove beneficial even for high-billers, whereby individuals with an annual income of Rs 25 lakh will save up to Rs 1.1 lakh.

Impact on the Middle Class

This change is anticipated to significantly lower the tax load for the middle class and increase the amount of disposable income available to them. According to the Finance Minister, this alteration will aid in enhancing economic development through the rise in consumer spending and promoting savings and investments.

Future Steps

This will also be followed by the introduction of a new Income Tax Bill in the parliament which aims to make the rules and language simple for both the taxpayers and administrators and to help make the tax system more efficient through reducing disputes.

Simply put, this is a middle class budget amply relieving middle class families from this charade of insecurity.