Sat Feb 01 07:00:00 UTC 2025: ## Modi Government Announces Major Tax Relief for Middle Class in Budget 2025
**New Delhi, [Date]** – In a significant move aimed at boosting the middle class, India’s Finance Minister Nirmala Sitharaman today announced sweeping changes to the income tax slabs in the Modi government’s first full budget of its third term. The new regime offers substantial tax benefits, making a significant portion of income tax-free.
The biggest change is the introduction of a new tax slab offering zero tax on income up to ₹12 lakh. This includes the standard deduction of ₹75,000. Previously, income up to ₹3 lakh was tax-free. This effectively raises the tax-free threshold substantially.
The new tax slabs are as follows:
* **₹0 – ₹12 lakh:** 0% tax
* **₹12 – ₹16 lakh:** 15% tax
* **₹16 – ₹20 lakh:** 20% tax
* **₹20 – ₹24 lakh:** 25% tax
* **Above ₹24 lakh:** 30% tax
The government claims this will result in significant savings for taxpayers. For example, individuals earning ₹12 lakh previously paid ₹80,000 in taxes; this is now reduced to zero. Those earning ₹16 lakh will save ₹50,000, while savings increase to ₹70,000 for those earning ₹18 lakh, ₹90,000 for ₹20 lakh earners, and ₹1.10 lakh for those earning ₹25 lakh or more.
The changes mark a departure from the previous tax regime, which had different slabs and higher tax rates for similar income brackets. The government highlighted this as a significant step towards easing the tax burden on the middle class and stimulating economic growth. The impact of this change on government revenue and overall economic activity will be closely watched.
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