Sun Feb 02 08:51:21 UTC 2025: ## India’s Budget 2025 Offers Significant Tax Relief for Middle Class

**NEW DELHI, Feb 2, 2025** – Finance Minister Nirmala Sitharaman presented Budget 2025 today, offering substantial tax relief to the middle class. A key highlight is the elimination of income tax for individuals earning up to ₹12 lakh annually.

However, this relief doesn’t extend to income from capital gains or lottery winnings. If an individual’s total income reaches ₹12 lakh, including such sources, they will be liable for tax. This is because Section 87A, which provides a tax rebate, doesn’t apply to income from these specific sources. Such income is considered “specially rated income.”

Section 87A previously offered full tax exemption for those with an annual income below ₹5 lakh under the old tax regime. Budget 2025 expands this to ₹12 lakh, increasing the maximum rebate from ₹12,500 to ₹60,000 under the new tax regime.

Long-term capital gains are taxed at 12.5%. The government’s increase in the rebate limit to ₹60,000 means that while individuals earning ₹12 lakh annually won’t pay tax, the composition of that income matters. For example, an income of ₹8 lakh from salary and ₹4 lakh from long-term capital gains or lottery winnings would only receive the rebate on the ₹8 lakh salary portion. The ₹4 lakh would be subject to tax.

Taxpayers can claim the rebate by filing their Income Tax Return (ITR). Previously, an individual earning ₹12 lakh might have paid ₹80,000 in tax. This measure effectively saves taxpayers up to ₹80,000.

The budget has been widely welcomed for its positive impact on the middle class. Further details are available on [link to source].

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