Sat Feb 01 12:00:46 UTC 2025: ## India’s Budget 2025 Brings Tax Relief, But Confusion Remains

**New Delhi** – India’s Finance Minister Nirmala Sitharaman unveiled Budget 2025, featuring a revised tax structure aimed at benefiting middle-class taxpayers. While the new tax slabs offer increased relief, particularly for those earning up to ₹12 lakh annually, the changes have left many questioning the exact implications.

The new tax regime introduces the following slabs: 0% tax on income up to ₹4 lakh; 5% on income between ₹4 lakh and ₹8 lakh; 10% on income between ₹8 lakh and ₹12 lakh; 15% on income between ₹12 lakh and ₹16 lakh; 20% on income between ₹16 lakh and ₹20 lakh; 25% on income between ₹20 lakh and ₹24 lakh; and 30% on income above ₹24 lakh. This represents a significant shift from the previous structure, raising the zero-tax threshold from ₹3 lakh to ₹4 lakh and expanding other brackets. A rebate system further reduces tax liability for those earning up to ₹12 lakh, effectively making their income tax-free up to ₹12.75 lakh including standard deductions.

For example, an individual earning ₹16 lakh annually would pay ₹120,000 in tax under the new regime – ₹50,000 less than under the existing system. High-income earners also see a reduction; someone earning ₹50 lakh would save over ₹110,000.

However, the old tax regime remains unchanged, leaving taxpayers to choose between the new simplified system, which eliminates many exemptions, and the older, more complex one. Deloitte India Partner Divya Baweja advises taxpayers to carefully compare their potential deductions and exemptions under the old regime against the benefits offered by the new slabs to determine which option is more advantageous. The decision, she emphasizes, depends heavily on individual circumstances.

The Budget’s focus on tax relief aims to stimulate consumption by putting more money into the hands of middle-income groups while providing marginal benefits to higher earners. However, the complexity of the changes and the need for careful individual assessment have resulted in widespread confusion among taxpayers.

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