Budget 2025 Income Tax Calculation: Zero Tax on earnings up to 12 lakhs! Such will be benefited – StudyToperC

The Government of India presents the budget every year, in which new schemes and policies are announced for the general public and various sectors. In Budget 2025, a major relief has been announced regarding Income Tax. This time the government has taken this step keeping in mind the middle class and employed people. Now no tax will have to be paid on annual income up to Rs 12 lakh. This decision can prove to be a major relief for the taxpayers of the country.

In this article, we are going to tell you how to get the benefit of zero tax on the earnings of up to 12 lakhs, how will it be calculated and what is the purpose of the government behind it. Also, we will give you complete information about this scheme so that you can take advantage of it correctly.

Income tax exemption in Budget 2025: Main things

In the table below, the main things related to income tax exemption are given under Budget 2025:

Zero tax on earnings up to 12 lakhs: How to benefit?

The government has introduced a new tax slab, in which there will be no tax on income up to Rs 12 lakh. Earlier this limit was only 5 lakh rupees. This means that now more people will be able to take advantage of this exemption.

How will calculation happen?

Suppose your annual income is 12 lakh rupees. Even if you do not take advantage of any type of discount (eg HRA, PPF, LIC premium etc.), you will not have to pay any tax.

If your income is more than this, then tax will be levied according to the new slab. For example:

• Up to 12 Lakh: Zero Tax
• 12-15 lakh: tax at minimum rate
• More than 15 lakhs: Tax at high rate

Difference between old and new system

There was a tax exemption on income up to Rs 5 lakh in the old system, while in the new system it has been increased to Rs 12 lakh. This will directly benefit the middle class.

Benefits of this scheme

This new policy will give the following advantages:

• Relief to the middle class: Employed and small businessmen will benefit the most.
• The ability to spend will increase: When people save more money, they will spend it, which will speed up the economy.
• Savings will be promoted: People will invest in their savings plans.
• Increase in investment: People will use extra money in mutual funds, stock market or other investments.

Government’s purpose

The government has kept the main objective of implementing this scheme the following:

1. Making middle class families financially strong.
2. Promote consumption in the country.
3. To encourage investment and savings.
4. Powering the economy at a fast pace.

Income Tax Slabs 2025 (new slab system)

In the table below, the details of the tax rates are given according to the new slab system:

This slab will apply to employed people as well as businessmen and other taxpayers.

How to prepare to take advantage of the scheme?

If you want to take maximum advantage of this scheme, then keep in mind the following things:

• Correctly assess your annual income.
• Invest in savings schemes (PPF, EPF) and insurance schemes as much as possible.
• Do tax planning in time so that you do not have to face any problem.
• Consult your chartered accountant or financial advisor.

Will this scheme be beneficial for everyone?

Although this scheme is very beneficial for the middle class, people with high income will not get much benefit from this. Apart from this, the government has also laid down some conditions with this scheme which will be clear in the coming time.

Possible challenges

1. The pressure on the government treasury may increase.
2. High income groups will get limited benefits.
3. Tax collection may be reduced.

Disclaimer:

This article is written only for the purpose of giving information. This scheme announced in Budget 2025 is currently in the initial stage and detailed guidelines will be issued to implement it. Please reach a decision only after taking advice from official announcements and advice from experts.