Biggest Tax Bonanza Ever! Budget 2025 Brings Smiles to Millions
The Union Budget 2025 has come out with a gift – perhaps the biggest ever tax bonanza for individual taxpayers! Whether you’re a middle-class taxpayer juggling with expenses or a High Net Worth Individual (HNI) managing your wealth, this budget has something for you. From revised tax slabs to an upgraded rebate structure, the tax landscape is changing dramatically. Let us have a glance at the new tax slab, tax rate & tax rebate as proposed in the budget and how it would benefit all the taxpayers.
1. New Income Tax Slabs – More Savings, More Smiles!
The government has decided to leave the Old Tax Regime (OTR)untouched but has restructured the New Tax Regime (NTR) to offer more breathing room. Let us have a quick comparison of the tax slab & rate thereof for the FY 2025-26 vis a vis FY 2024-25:
| Tax Rate | Income Range for the FY 2024-25 | Income Range for the FY 2025-26 |
| Nil | Up to Rs. 3 Lakh | Up to Rs. 4 Lakh |
| 5% | From Rs. 3 Lakh to Rs. 7 Lakh | From Rs. 4 Lakh to Rs. 8 Lakh |
| 10% | From Rs. 7 Lakh to Rs. 10 Lakh | From Rs. 8 Lakh to Rs. 12 Lakh |
| 15% | From Rs. 10 Lakh to Rs. 12 Lakh | From Rs. 12 Lakh to Rs. 16 Lakh |
| 20% | From Rs. 12 Lakh to Rs. 15 Lakh | From Rs. 16 Lakh to Rs. 20 Lakh |
| 25% | — | From Rs. 20 Lakh to Rs. 24 Lakh |
| 30% | Above 15,00,000 | Above 24,00,000 |
The result? More money in your pocket and fewer tax headaches.
2. Nil Tax for taxpayers with Income not exceeding Rs. 12 Lakh:
The biggest game-changer proposal in the Budget is enhanced rebate under Section 87A, which ensures that individuals earning up to ₹12 Lakh pay zero tax! As of now, this benefit was capped at an income of ₹7 Lakh with tax rebate cap of Rs. 25,000/-.New budget enhanced it significantly. A few illustration of how the new rebate benefits the individuals is given in the table below:
| Income | Present Tax Liability | Proposed Tax Liability | Benefit with New Rate & Slab | Rebate benefit with New Slab/Rate | Total Benefit as compared to Last Year | Final Tax Liability with New Tax Rate/Slab |
| 8 lac | 30,000 | 20,000 | 10,000 | 20,000 | 30,000 | 0 |
| 9 lac | 40,000 | 30,000 | 10,000 | 30,000 | 40,000 | 0 |
| 10 lac | 50,000 | 40,000 | 10,000 | 40,000 | 50,000 | 0 |
| 11 lac | 65,000 | 50,000 | 15,000 | 50,000 | 65,000 | 0 |
| 12 lac | 80,000 | 60,000 | 20,000 | 60,000 | 80,000 | 0 |
| 16 lac | 1,70,000 | 1,20,000 | 50,000 | 0 | 50,000 | 1,20,000 |
| 20 lac | 2,90,000 | 2,00,000 | 90,000 | 0 | 90,000 | 2,00,000 |
| 24 lac | 4,10,000 | 3,00,000 | 1,10,000 | 0 | 1,10,000 | 3,00,000 |
| 50 lac | 11,90,000 | 10,80,000 | 1,10,000 | 0 | 1,10,000 | 10,80,000 |
Marginal relief as provided earlier is also applicable for income little higher than Rs. 12 Lac. However, hold on before celebrating. If your income includes capital gains, you’re out of luck. The rebate doesn’t apply to those making money from investments like stocks or property sales. So, while your salary, business or other normal income is protected, your capital gains might still be taxed.
3. Standard Deduction for salaried taxpayers: Rs. 50,000/- or Rs. 75,000/-
It may be recalled that the standard deduction limit for salaried taxpayers has already increased from Rs. 50,000/ to Rs. 75,000/- in the last year Budget (Part – 2.0). There is no change in the said limit and the same has been kept intact at Rs. 75,000/-. As a result of this, the salaried taxpayers with income up to Rs. 12.75 Lakh will have the nil tax liability.
Final Thought – A Historic Dream Budget:
No new compliance burdens, no additional taxes—just pure relief and higher take-home income. Union Budget 2025 will go down in history as a milestone for taxpayers under Modi 3.0. Such sweeping tax benefits in a single stroke are rare, making this budget truly one for the books.
And the good news doesn’t stop here! In the coming weeks, we’ll unravel even more positive and taxpayer-friendly proposals hidden in the fine print. Stay tuned—your tax savings journey has just begun!
[Views expressed are the personal view of the author. Readers are advised to seek professional advice before taking any decisions. Readers may forward their feedback & queries at nareshjakhotia@gmail.com. Other articles & response to queries are available at www.theTAXtalk.com]
The Copy Of the Attachments is as under:
