Sat Feb 01 12:40:00 IST 2025: ## India Announces Major Income Tax Changes: No Tax on Annual Income Up to ₹12 Lakh

**New Delhi, India** – Finance Minister Nirmala Sitharaman announced sweeping changes to India’s income tax system, declaring that annual incomes up to ₹12 lakh will now be completely tax-exempt under the new tax regime. This significantly increases the previous threshold of ₹7 lakh. The standard deduction remains unchanged at ₹75,000.

The new tax slabs, effective immediately under the new tax regime, are as follows:

* ₹0 – ₹4 lakh: 0% tax
* ₹4 lakh – ₹8 lakh: 5% tax
* ₹8 lakh – ₹12 lakh: 10% tax
* ₹12 lakh – ₹16 lakh: 15% tax
* ₹16 lakh – ₹20 lakh: 20% tax
* ₹20 lakh – ₹24 lakh: 25% tax
* Above ₹24 lakh: 30% tax

This move is expected to provide substantial relief to middle-class taxpayers. A new income tax bill incorporating these changes will be introduced in parliament next week.

The Finance Minister’s announcement follows a history of fluctuating income tax rates in India, reflecting economic growth and evolving societal needs. Past adjustments, including changes made in 1997 by P. Chidambaram and subsequent modifications under the Narendra Modi government, have shaped the current tax landscape. The government has previously adjusted tax slabs and surcharges, impacting various income brackets. While tax rates remained largely stable during the COVID-19 pandemic, certain provisions saw adjustments for higher income earners. The new changes represent a significant shift in the government’s tax policy.

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